By: Peter J. Kulick
- Reduce the corporate tax rate to 15%, from the current highest rate of 35%.
- Offer taxpayers a one-time opportunity to repatriate foreign earnings at no or a low tax cost.
- Eliminate the world-wide tax philosophy of the Internal Revenue Code of 1986 and replace it with a territorial tax approach — meaning only U.S. activities would be reached by the Code.
- Reduce the individual tax rates to 3 brackets at yet-to-be determined rates.
- Broaden the base by eliminating many existing tax deductions. From public comments, we know that the Trump Administration has backed away from eliminating the interest exclusion for state and local bonds, eliminating the home interest deduction, and eliminating the charitable contribution deduction.
While the framework is light on details, the scope of reform embedded in the framework suggests a comprehensive, wide-ranging tax reform effort. There is also a strong desire to make any tax reform permanent, which means lost revenue will ultimately need to be offset by savings. All these signs point to a long, protracted policy debate. In turn, the political realities call into question whether meaningful tax reform can be enacted by the end of 2018.
If you have any questions, please contact Peter Kulick in the Lansing, Michigan office at 517-487-4729.