The Trump tax proposal – essentially the same as during the campaign and roughly based on the House Ways and Means Committee “Better Way” proposals is easiest to think of in four broad strokes:
- Individual taxes (including estate tax repeal, increased standard deduction, rate reduction and offset – partially – by some deductions).
- Tax Relief for small and medium businesses organized as pass-thrus (proposed 15% rate for business income). (offsets see #3 below)
- Corporate Tax reduction to 15% (offset by elimination/reduction of various business tax credits and incentives).
- International Tax – go to a territorial tax system and a one-time tax on overseas earning.
The proposal – while little in detail and not breaking new ground is viewed as an aspirational documents or rhetorical discussion. However, it has certainly jump started the discussion on tax reform in DC.
My interest is the four legs of the stool (above) that the administration has consistently put forward. It is clear that tax cuts will be a balance of individual/family, small and medium business and corporate/int’l relief. While, I don’t think the numbers put forward will stay in place (ex. 15% rate for business and corporate) – the 10,000 foot policy goals will.
Dean Zerbe is alliantgroup’s National Managing Director based in the firm’s Washington, D.C. office. Prior to joining alliantgroup, Zerbe was Senior Counsel and Tax Counsel to the U.S. Senate Committee on Finance. He worked closely with then-Chairman of the Finance Committee, Senator Charles Grassley, on tax legislation. During his tenure on the Finance Committee, Zerbe was intimately involved with nearly every major piece of tax legislation that was signed into law, including the 2001 and 2003 tax reconciliation bills, the JOBS bill in 2004 (corporate tax reform) and the Pension Protection Act. Zerbe is a frequent speaker and author on the outlook for short-term and long-term changes in tax policy, as well as ways accounting firms can help their clients lower their tax bill.