Mnuchin defends proposal to eliminate tax deduction that benefits Californians
Treasury Secretary Steven Mnuchin has been defending the Trump administration tax plan, including the proposal to eliminate the federal deduction for state income taxes. (Chip Somodevilla / Getty Images)
Steven T. Mnuchin on Monday stumped for the Trump administration tax plan rolled out last week, saying that a simpler tax code and lower corporate taxes — combined with other Trump-backed policies — will lead to robust economic growth.
Speaking at the Milken Institute Global Conference, a Beverly Hills confab for investors, Mnuchin said he has been meeting weekly with House Speaker Paul D. Ryan (R-Wis.) and others and believes a final tax plan will have the support of Congress — despite concern that it could add significantly the federal deficit.
"We absolutely share the same vision of what we’re trying to do," Mnuchin said during an on-stage interview with Fox Business host Maria Bartiromo. "We’re all on the same page."
The tax plan, as laid out in a one-page outline released last week, calls for what Mnuchin, a former Goldman Sachs banker and Hollywood film financier, said was “one of the biggest tax cuts in American history.”
It would cut the corporate tax rate from 35% to 15%, lower personal income tax rates, cut the number of tax brackets and eliminate numerous tax deductions.
Mnuchin said the plan, along with regulatory relief, over the course of two years should help the country get past 2% to 3% economic growth.
He maintained that the cuts can be paid for by eliminating deductions and by the higher economic growth they would spur. But he cautioned the plan remains a work in progress and that any estimates of how much the plan might add to the federal budget deficit are preliminary.
"When we come out with all the details, it’ll be scored," he said.
He also defended the proposal to eliminate the federal deduction for state income taxes. That itemized deduction is something that residents of high-income states such as California rely upon to lower their federal tax rate.
He noted it would hit him personally.
"We don’t think it’s the federal government’s job to be subsidizing states," Mnuchin said. "Some states have zero income taxes, some have high income taxes. … For people like me who live in California, you’re going to be stuck with higher taxes that you can’t deduct."
But he added there were no plans to remove other cherished deductions.
“Charitable deductions, that’s something we support,” he said. “And mortgage interest, that’s kinda like apple pie.”
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