Tax Reform Framework Released


The Trump Administration, the House Ways and Means Committee, and the Senate Finance Committee have released a Framework for Tax Reform. The unified framework is intended to be used as the foundation to craft tax legislation and to serve as the template for the various tax-writing committees that will develop the legislation to eventually be voted on by the House and Senate. The highlights are as follows:

Individual Tax Reform

  • Individual brackets to 12%/25%/35% from 7 with 39.6% highest
  • Standard deductions doubled
  • Child Tax Credit kept and enhanced GOP
  • ‘Loopholes’ eliminated – All but the following to go away
    •  Mortgage interest deduction kept
    •  Charitable contributions kept
    •  Benefits that encourage work, education & retirement security
  • Alternative Minimum Tax (AMT) – Gone
  • Estate Tax – Eliminated

Business Tax Reform

  • Corporate Rate down to 20%
  • Tax Rate on Small Business income 25% including
    • Sole Proprietors
    •  Partnerships & S Corporations
  • “Expensing” of Capital Investments for at least 5 years
  • Interest Expense deduction limitations imposed for Corporations
  • US move to a ‘territorial’ tax regime
    •  Repatriation of overseas earnings – Deemed to occur
    •  Spread of tax over several years
  • Business Special Deductions and Credits mostly gone
    •  Research & Experimentation Credit retained
    •  Sec. 199 Manufacturing deduction gone

It is stressed that this document is still very early in the process, and nothing in the template is assured of inclusion in the final legislation.

About the Authors

Michael A. Hydell
Michael A. Hydell
Senior Manager, Taxation Services
Robert M. Burak
Robert M. Burak
Partner Emeritus, Taxation Services


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