President Trump and GOP Congressional Leaders Release Tax Overhaul Plan
Yesterday President Trump, the House Committee on Ways and Means and the Senate Committee on Finance released their framework for tax reform, which represents the most detailed proposal for changes to the tax code issued during the Trump administration. The framework’s key elements include:
- a reduction in corporate tax rates to 20% and partial limitation on the deductibility of interest for corporate taxpayers;
- a shift to a modified “territorial” regime of corporate taxation that eliminates tax on dividends from foreign subsidiaries but subjects all foreign earnings to current taxation at a minimum rate to be determined;
- immediate expensing of certain capital expenses for five years;
- a 25% maximum tax rate applicable to income derived from small and family-owned businesses conducted through pass-through entities or sole proprietorships; and
- an increase in the standard deduction and the elimination of most itemized deductions (including the deduction for state and local taxes).