On April 26, 2017 the Trump Administration issued an outline on “2017 Tax Reform for Economic Growth and American Jobs” calling it “the biggest individual and business tax cut in American history”.
What does this mean?
First, it is important to understand it is only an outline. Many of the details still need to be worked out by agreement first among the Republican majority and likely with some Democratic support as well. These things take time, it is uncertain at this point whether tax reform, if any, will occur in 2017 or 2018, or whether such changes will be permanent or temporary like they were with the Bush Era tax cuts.
Key points and take-away items from the Trump Outline:
Tax relief for American families:
- Reducing the 7 tax brackets to 3 brackets of 10%, 25%, and 35%
- Doubling the standard deduction
- Providing tax relief for families with child and dependent care expenses
- Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers
- Protect the home ownership and charitable contribution tax deductions
- Repeal the Alternative Minimum Tax
- Repeal the Estate Tax
Repeal the 3.8% Net Investment Income tax that hits small business and investment income.
- 15% business tax rate
- Territorial tax system on income earned by U.S. companies abroad
- One-time tax on trillions of dollars held overseas
- Eliminate tax breaks for special interests
Over the coming weeks and months, the Trump Administration and Congress have much work to do to hammer out the details and reach agreement on these outlined points. One thing seems certain - there will be change, however, the shape this change takes and over what time period remains to be seen.
If you have any questions contact one of RubinBrown’s Tax Services Group professionals.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.
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