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Wednesday, April 26, 2017

The Main Highlights In Trump's Sweeping Tax Reform Proposal

In brief, the tax reform was largely in line with what was leaked and what was expected. Small surprises: the tax bracket for high-income earners was 2% more (at 35%) than what Trump campaigned on, and the standard deduction has been doubled so that no married couple pays tax on their first 24k earned, Citi notes.
As expected, no mention of border adjustment taxes. The plan also looks to repeal real estate taxes, alternative minimum tax, and the death tax. Territorial taxes are also included. As we type, Mnuchin and Cohn are answering their last question.
Below is the actual tax from the White House:

2017 Tax Reform for Economic Growth and American Jobs

The Biggest Individual And Business Tax Cut in American History

Goals For Tax Reform

  • Grow the economy and create millions of jobs
  • Simplify our burdensome tax code
  • Provide tax relief to American families—especially middle-income families
  • Lower the business tax rate from one of the highest in the world to one of the lowest

Individual Reform

  • Tax relief for American families, especially middle-income families:
    • Reducing the 7 tax brackets to 3 tax brackets off to%, 25%, and 35%
    • Doubling the standard deduction
    • Providing tax relief for families with child and dependent care expenses
  • Simplification:
    • 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 death tax
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income

Business Reform

  • 15% business tax rate
  • Territorial tax system to level the playing field for American companies
  • One-time tax on trillions of dollars held overseas
  • Eliminate tax breaks for special interests

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