The White House has released its “2017 Tax Reform for Economic Growth and American Jobs.” The one-page outline offers a list of proposals aimed at lowering (and simplifying) the tax code in order to rev up the country’s economic engine. Among its stated goals is “lowering the business tax rate from one of the highest in the world to one of the lowest.”
Specifically, the proposal aims to simplify brackets and lower tax rates, synchronize corporate and small business rates, improve American competitiveness with a territorial tax system and repeal a number of unpopular (and popular) portions of the tax code.
Here are the specifics of the proposal. How many of these items will be enacted, and whether they will be enacted all or in part is up to Congress.
Proposed Tax Relief for Individuals
- Reduce the seven tax brackets to three brackets of 10%, 25% and 35%
- Double the standard deduction
- Provide tax relief for families with child and dependent care expenses
Proposed Simplification for Individuals
- Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers
- Protect the home ownership and charitable gift tax deductions
- Repeal the Alternative Minimum Tax
- Repeal the estate tax
In addition, the proposal aims to repeal the 3.8% tax on net investment income
Proposed Tax Relief for Business
- Set a 15% business tax rate
- Create a territorial tax system to level the playing field for American companies
- Levy a one-time tax on trillions of dollars held overseas
- Eliminate tax breaks for special interests
During May, the White House will conduct listening sessions with business owners on the proposals, as well as work with both the House and Senate on details of the plan.
For more information on how these proposals may impact you, please contact your tax advisor.