e-newsletter client login
articles and presentations
financial calculators
record retention
tax news
useful site links

Join our mailing list

We publish an e-newsletter that includes the latest news and tax alerts. To subscribe, enter your email address below:


 
White House Calls for Significant Tax Cuts and Other Tax Reforms
Grossman St. Amour CPAs PLLC
May 2017

President Trump on April 26th, just before his “100 days” in office, unveiled his highly-anticipated tax reform outline –the “2017 Tax Reform for Economic Growth and American Jobs.” The outline calls for dramatic tax cuts and simplification: lower individual tax rates under a three-bracket structure, doubling the standard deduction, and more than halving the corporate tax rate; along with changing the tax treatment of pass-through businesses, expanding child and dependent incentives, and more. Both the alternative minimum tax and the federal estate tax would be eliminated. The White House proposal does not include spending and tax incentives for infrastructure; nor a controversial “border tax.”

According to White House officials, the President’s proposals set out broad principles with specifics to be hammered-out in coming weeks. Actual “bill language” with details is now expected sometime in June now that the President has thrown his support officially to tax reform.

Individuals

For individuals, the White House proposed consolidating and reducing the tax rates to 10, 25 and 35 percent. Cohn said that no income brackets have yet been developed for the proposed lower rates. The proposal also calls for doubling the standard deduction. "Married couples would have a $24,000 standard deduction," National Economic Council Director Gary Cohn said at a White House briefing. He predicted that doubling the standard deduction would simplify tax filing for millions of Americans.

Along with repealing the federal estate tax, the AMT and the NII tax, the proposal calls for abolishing nearly all individual credits and deductions." The plan eliminates all individual deductions except mortgage interest and charitable deductions," Treasury Secretary Steven Mnuchin has stated. The plan also calls for unspecific tax relief for families with child and dependent care expenses.

The White House plan apparently keeps the current framework for capital gains and dividend taxes. However, it would repeal the 3.8-percent NII tax. "The president looks at [the NII tax] as being a tax on capital," Cohn said.

Businesses

During the campaign, President Trump proposed to reduce the corporate tax rate and cut taxes on small businesses. The plan does both, Cohn and Mnuchin said. The corporate tax rate would fall to 15 percent. "Small and mid-size businesses will be eligible for the 15-percent rate,"  Mnuchin said, referring to partnerships, S corporations and sole proprietorships in which income is currently passed through to their owners at individual income tax rates. "We will make sure that there are mechanisms in place to prevent wealthy people from taking advantage of the rules for small businesses," he added.

The proposal would also move the U.S. to a territorial tax regime. "A territorial system means U.S. companies will pay tax on income related to the U.S.," Mnuchin said. "U.S. companies will not be subject to worldwide income tax," he added.

Not included in the proposal is so-called border adjustability. House Republicans have promoted a border adjustment tax as a way to pay for tax reform. Mnuchin predicted that the president’s plan would "pay for itself" but did not elaborate how. "Lots and lots of details will go into how it will pay for itself. This will pay for itself with growth and closing loopholes," he said.

Another business proposal would provide for a one-time, reduced tax rate on earnings repatriated to the U.S. The White House has not said yet what the rate would be but predicted it would be a "very competitive rate."

If you have questions and would like to discuss how these potential changes could affect you or decisions to make before year end, please contact us at 315.424.1120 or tkiesa@gsacpas.com.



back to articles & presentations

 
ssc
 

 


Grossman St. Amour CPAs PLLC
110 West Fayette Street, One Lincoln Center, Suite 900 • Syracuse, NY 13202
T 315.424.1120   F 315.422.0829   info@gsacpas.com
Privacy Policy
  PrimeGlobal

Home
| About Us | Our Team | Firm News | Community Involvement | Associations/Memberships | Client Testimonials | Accounting & Auditing Services | Audit & Attest Engagements | Financial Statement Preparation | Bookkeeping | Internal Control Review | Fraud Examination & Deterrence | Consulting Services | Business Formation & Valuation | Financial Benefits & Retirement Planning | Merger, Acquisition & Succession Planning | Management Consulting | Real Estate Planning | Technology Consulting | Tax Services | Income Tax Return Preparation | Payroll & Sales Tax Return Preparation | Tax Planning for Businesses | Tax Planning for Individuals | IRS and State Tax Audit Representation  | Industries Served  | Affordable Housing | Construction & Real Estate | Employee Benefit Plans | Equestrian Businesses | Fire Districts Government / Municipalities | Medical Practices & Healthcare | Not-For-Profit | Public School Districts | Manufacturing and Retail Distribution | Resources | Articles & Presentations | Financial Calculators | Record Retention Guidelines | Tax News | Useful Site Links | Career Opportunities | Benefits | Employee Testimonials | Contact Information | Directions