James S. Brady Press Briefing Room White House
MS. SANDERS: I’d like to start today’s briefing by bringing up Treasury Secretary Steven Mnuchin. The IRS is releasing new withholding tables, which is great news for American workers who are going to be keeping more of their hard-earned money as a result of the new tax cut law. And the Secretary will get into those details on that and then answer a few of your questions on that topic. And then, as always, I’ll be back up here to take questions on other news of the day.
And with that, Mr. Secretary.
SECRETARY MNUCHIN: Thank you very much, and it’s a pleasure to be here. Let me first just comment and say I am pleased that I will be leading the economic delegation for the President in Davos. We’ll have a very good, large group of Cabinet members traveling with us, and Sarah will give more information on that later.
I’d like to talk about the withholding tables. So today, the Treasury Department and IRS released new withholding guidance that will implement the Tax Cut and Jobs Act. This new guidance will mean that workers and their families will receive larger paychecks starting in February.
This has been a massive project that we’ve been working on, beginning to implement the tax plan. There’s a lot of work left to be done, but we’re estimating that 90 percent of the workers are going to see an increase in take-home pay because of the Tax Cuts Act.
This historic legislation doubles the standard deduction, simplifies the filing process, lowers the rate for millions of middle-income Americans and their families.
I want to acknowledge the Treasury’s Office of Tax Policy and the IRS who worked round-the-clock to meet our important objective to work with the existing forms and the existing systems. We want to minimize the burden on both employers and hardworking taxpayers in getting this implemented in February.
This is just the first step in a three-step process. Next, the IRS will be releasing a new withholding calculator that will be available on IRS.gov by the end of February. This will help provide individuals with certainty so that they are neither over-withheld or under-withheld and can plan their financial decisions.
We have reviewed this very carefully, and based upon last year’s withholding tables, approximately 76 percent of taxpayers were withheld so that they had refunds at the end of the year. We expect, based upon the new tables, there will be no material change in this number.
We will encourage taxpayers to use the calculator when it is released, and we’ll launch a marketing effort to make sure people understand that.
Finally, I’d like to say that the Treasury and IRS will work together to release a new W-4 for 2019. We expect to release that later in the year. We will be meeting with employers, payroll providers, to determine how to best to design the form to reflect the new law. And the IRS will continue to focus on simplification and a user-friendly process.
These new tables will help deliver the tax cuts as soon as possible to as many Americans as possible, with as little disruption as possible. This will continue to focus and fuel the optimism in economic growth that is returning to this country.
I’d also like to highlight the announcement this morning from Walmart. We want to thank them. They will be increasing their minimum wages, issuing bonuses, and expanding family benefits for over a million employees. Walmart is the latest company to make such an announcement, directly result of the Tax Cuts Act, and they join over 130 other companies across the nation who have already given such relief. We’re now up to over 2 million workers that have seen either special bonuses or additional wages.
And with that, I’m happy to answer any questions. I have to start with you, because you had the hat.
Q Okay, thanks. (Laughter.) You made me laugh. In regards to Walmart and the minimum wage — and since they already have the money and are increasing the minimum wage, does that mean that we can expect movement on the federal government’s behalf to increase the federal minimum wage for everyone?
SECRETARY MNUCHIN: Well, I think the most important issue is for companies to increase their wages, and Walmart’s number is already above the minimum wage. This is obviously an issue for the federal government; it’s an issue for states. But I’d say the real focus, which is what the Tax Cuts Act has been all about, is putting more money in companies. We’ve said all along we believe that 70 percent of this will be returned to workers.
Q And a quick follow-up. Do you believe that they should raise the minimum wage; that it should be a federal raise?
SECRETARY MNUCHIN: Next question, go ahead.
Q Mr. Secretary, just for those who are watching, on February 1st, will these withholding tables go into effect and that’s when the American taxpayer will first see a change in the withholding of their paycheck?
SECRETARY MNUCHIN: Well, it will definitely be in February. Some companies will have it set up for February 1st, some companies may have the next pay cycle. But we are encouraging companies to do this as quickly as possible. We’re ahead of schedule in the release of this. And we’d expect that in any event it’s in February.
Q And as far Davos, what is the point of the Trump administration going to a place that is regarded, usually, as a hangout for globalists?
SECRETARY MNUCHIN: Well, I don’t think it’s a hangout for globalists. I think the idea is the economic team is going to go over and talk about the America First economic strategy. We’re thrilled that the President is coming. And I think what we know is that the economy that’s good for the U.S. is good for the rest of the world.
Q You just talked about Walmart, and that’s a big deal. What has been the efforts with Walmart, with this administration, for them to raise their wages?
SECRETARY MNUCHIN: Well, again, the whole purpose of the Tax Cuts Act was to put more money in companies so that they could compete competitively with international companies. I think you know we had one of the highest tax rates in the world. We taxed on worldwide income. We’ve changed that. I mean, this is really a revolutionary process. We thought it would be great for the economy, and we’re thrilled with, already, the number of companies we see reacting accordingly.
Q But have you been talking with Walmart on this? How long have you been talking?
SECRETARY MNUCHIN: We’ve been talking with lots of companies for a long time, and we’re thrilled with how people are responding.
Q Thank you, Mr. Secretary. You are using an outdated — or the system will use an outdated W-4 form for this year. You will encourage people to go onto a calculator on the IRS website and maybe try to figure things out. Taxes are messy to begin with. How is this not going to lead to, in one way or another, some sort of implementation mess?
SECRETARY MNUCHIN: Well, you know, I’ve given enormous amount of credit for the team at Treasury and the team at IRS who have literally be working around the clock through the holidays.
You mentioned we had an existing form, we had existing technology. We had to figure out how to fit this in this format. That fact that we’ve been able to keep the same percentage of people that get refunds — we wanted to make sure that people weren’t over-withheld or under-withheld. So we ran lots of models to run this. That’s phase one.
Phase two: As soon as the calculator comes out — the calculator will work with the new tax system — child tax credits, $10,000 deduction — so a taxpayer can see, do I have the right number of exceptions that are filed or should I adjust that.
And then, as I said, we’re going to work on a super user-field form that fits the new tax system. We’re going to try to do that. I want to make sure we get a lot of feedback as we design that and update this.
Q I guess when people are hearing a three-step implementation process of a massive tax systems, in no way this was rushed to try to get this out there for pay checks in February?
SECRETARY MNUCHIN: Absolutely not. I mean, we update the withholding tables every year. You know, there’s more work, but again, our objective is to get people money as quickly as they can. Ninety percent of the people will see changes.
Yes, in the back.
Q Thanks, Mr. Secretary. I just want to be clear. It sounds to me like you are saying that the administration’s policies are partly responsible for the Walmart wage rise, but that the layoffs have nothing to do with you? Is that — am I understanding that correctly? And is that not inconsistent?
SECRETARY MNUCHIN: What I’m saying is, the administration’s economic policies are a function of what we see — growth and investment. Different companies will do different things. Some companies will invest capital. Some companies will return money to workers. Lots of things are going on in the economy, and we appreciate what Walmart is doing.
Q Yes, thank you, Mr. Secretary. Last year at Davos, Chinese leader, Xi Jinping, made a speech and he talked about isolationism not necessarily being a good policy for most countries around the world. And so it was viewed very much as China making entreaties to a global economy, saying, “Hey we’re open for business at a time when other countries are turning inward.” Is the President going to respond to that line of argument when he goes to Davos? What’s he going to say when he’s there?
SECRETARY MNUCHIN: Well, I think you’ve heard a lot of the President’s messages. I expect that they’ll be consistent. I expect the President will talk about trade — reciprocal, free, and fair trade. We’ve obviously been very clear with the Chinese on the issue that we have with the trade deficit and making sure that the U.S. companies can compete fairly. And the President will talk a lot about his economic program and the impact on the global economy.
Q Thank you, Mr. Secretary. Staying with trade, can you give us an update on the negotiations over NAFTA? And how concerned is this administration over the fact that Canada has recently made a complaint to the WHO and that Mexico is concerned that this administration will, in short order, withdraw from NAFTA
SECRETARY MNUCHIN: We gave the President an update this morning on trade. I think he’s very pleased with where things are going. Ambassador Lighthizer is doing an amazing job renegotiating NAFTA, and we expect that will be renegotiated or we’ll pull out.
Q Yes, Mr. Secretary, I know you’ve had a lot going on with taxes, but since we have you here, could you give us an update on Treasury’s progress on this list of Russian oligarchs that Congress had asked for? I believe we were expecting it sometime in January. Can you let us know where that’s a
SECRETARY MNUCHIN: We’re working on it as we speak. It should be released in the near future, and it’s something we’re very focused on.
Q Mr. Secretary, if I heard you correctly, you’re predicting that there won’t be a great increase — or decrease, rather, in the number of American taxpayers who used to get a refund, who — basically, the same number will still get a refund that have been expecting to get a refund all along. Is that correct?
SECRETARY MNUCHIN: That is correct. Again, what we’re trying —
Q And then, can you then address the Democrats’ charge that you all are juicing this?
SECRETARY MNUCHIN: Again, I think this is another ridiculous charge. That’s why I specifically want to make clear that there won’t be a change in that number. We have people who have worked very carefully on this.
Our objective is not to have taxpayers over-withheld so that they owe money at the end of the year. As I’ve said, kind of, we have a system. Ninety percent of the people will get money. Kind of, the same number of people will get refunds. And we’re going to actively encourage and make sure that taxpayers understand how to go onto the calculator once it’s up and running. We’ll work with payroll providers. We’ll work with companies. We’ll do education sessions so that taxpayers are properly withheld.
Q Are you expecting any new sanctions on Iran to come from Treasury
SECRETARY MNUCHIN: I am expecting new sanctions on Iran. We continue to look at them. We’ve rolled them out. And I think it’s a — you can expect there will be more sanctions coming.
Q Thank you, Mr. Secretary. Leaders in some states — Connecticut, New York, New Jersey — are talking about ways to limit the impact of the SALT scale-back, such as letting people pay their property taxes in a way that would then be charitably deductible. Is the administration going to try to halt any of those efforts? And how are you responding to that?
SECRETARY MNUCHIN: Well, let me just say, again, from the Treasury standpoint and IRS, I don’t want to speculate on what people will do. But I think it’s one of the more ridiculous comments, to think that you can take a real-estate tax that you’re required to make and dress that up as a charitable contribution.
I hope that the states are more focused on cutting their budgets and giving tax cuts to their people in their states than they are on trying to evade the law.
Q Thank you very much, Mr. Secretary. As the national debt clock approaches $21 trillion, I have a few real and quick questions. First of all, is this something that the administration is concerned about?
SECRETARY MNUCHIN: Again, I think we’ve said, under the last administration, the debt has gone from $10 trillion to $20 trillion, and of course, we’re focused on the debt. And that’s why we’re focused on economic growth. This tax plan was about economic growth that will create more revenues for the economy and more tax receipts for the government.
Q Okay. So then what can we realistically expect the national debt to be by the end of the — and I hope this is not a hypothetical — but by the end of the President’s first term, what can we hope the —
SECRETARY MNUCHIN: I don’t have a projection for that right now, but thank you.
Q Thank you, Mr. Secretary. You talk about the tax being flatter, and 90 percent of the taxpayers benefitting from it. Yet, it would seem that under those circumstances you’re going to eliminate a lot of the deductions which so many small businesses and self-employed business people depend on. Is there really a major cut in deductions? And how do you expect that will play with the small-business community?
SECRETARY MNUCHIN: Well, I think there have — you know, this is about tax simplification and getting rid of deductions — a lot of the deductions that rich people take. But I will tell you, on small businesses — I mean, one of the best features of the tax plan are all the features that go to small- and medium-sized businesses and pass-throughs. I mean, there are tremendous incentives, whether it’s the automatic expensing or whether it’s the discount for pass-throughs.
I mean, we’ve heard more good news from small business than even from the Walmarts of the world.
Q And self-employed business —
SECRETARY MNUCHIN: Self-employed too, yes.
Q Thank you. Mr. President, when you’re talk about the —
Q Mr. President?
Q I’m sorry, Mr. Secretary. (Laughter.)
SECRETARY MNUCHIN: He’s in the other room. (Laughter.)
Q 2020 news. Not yet.
Q Mr. Secretary, in talking about the impact and the benefit that most American workers will see under the tax cut plan, wouldn’t this be a good day for the President to release his tax returns so we can see how he benefits from the tax cut bill? And have you recommended that?
SECRETARY MNUCHIN: Again, I’ve had this question before when I’ve been up here. I’ll say the same thing — I’ll give the same answer I gave you last time. I think that there’s a ton of financial disclosure that the President has given the American people. They voted for him. He’s the President. I think people are happy with that. And the President will decide what he wants to do.
Q Mr. Secretary, what does the administration hope to achieve with these additional sanctions on Iran?
SECRETARY MNUCHIN: I think the President has been very clear that many aspects of the Iran deal need to be changed; that there are many activities outside of the Iran deal, whether it be ballistic missiles, whether it be other issues; that we will continue to sanction that are outside the JCPOA; human rights violations. We couldn’t be more focused. We have as many sanctions on Iran today as we have on any other country in the process and we’ll continue to look at things.
Q Thank you, Mr. Secretary. Just two quick follow-ups to a couple of questions that have been asked. On Ann’s question related to the Democratic charge about the issues that could come up next year, are you at all — just yes or no — was there any consideration given to the midterms when you guys ensured that the implementation of this would happen in February and not, for example, later, to give you more time to sort all of this out?
SECRETARY MNUCHIN: Again, let me just explain. The IRS issues tables every January. We knew we were changing the tax bill, so it obviously made sense to wait from January to February so that we gave people time to institute this.
Any claims that we’re doing this for political issues are ridiculous. Okay? I’d also make a comment. You know, the Democrats made a bunch of noise about our numbers and at tax policy. The Inspector General just came out with a report that made very clear there was no political interference in this, in how we ran these numbers.
So I would hope the Democrats are focused on doing things that are good for the economy and the American people.
Q And then just to follow up on Davos, to Major’s question and Eamon’s. You talked about the message being consistent, that the President will deliver in Switzerland. Obviously, one of his big messages has been aimed at middle-class Americans. He got elected on this populist platform. I’m hoping you can explain how it’s consistent to take members of his Cabinet — many of whom are very wealthy — to go rub elbows with a bunch of other very wealthy people in Switzerland. Can you explain the consistency on messaging?
SECRETARY MNUCHIN: I can assure you that the members of his Cabinet have no interest in going over there and rubbing elbows with anybody. This is about meeting business leaders. This is about meeting our counterparts. This is all about creating jobs, creating economic growth for the U.S.
As you know, there’s tremendous — there’s tremendous investment in the U.S. There’s tremendous trade deals going on. I think we’ve been very clear and the President has delivered. Look where the stock market is again. The President is delivering for American workers.
So this trip is all business. I can assure you it has nothing to do with anything other than that.
Q Thanks, Mr. Secretary. Can you please say, when it comes to charitable giving, people worry that the new tax code, with the higher standard deduction, could limit giving to charities. Do you share that concern?
SECRETARY MNUCHIN: I don’t share that concern at all, and I would say quite the opposite — that we’ve raised the limits that rich people can give to charity to encourage charitable donations.
So I’ll take one more question. In the back.
Q Thank you, Mr. Secretary. Will the President decide today on the Iran deal? And do you anticipate that he will waive sanctions like he has done in the past?
SECRETARY MNUCHIN: I am not going to make any specific comments on that. It is still under discussion, and I know the President is contemplating recommendations.
Thank you very much, everybody.
MS. SANDERS: Thank you, Secretary Mnuchin. Just a quick addition — because I know all of you are wondering about that Walmart announcement — it is based in Arkansas. (Laughter.) So just in case anybody — to clear that up, because I knew you guys were going to ask.
In all seriousness, the tax law is already having an incredible impact on American workers and families. And this is only the beginning of what people have to look forward to in the Trump economy.
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