President Trump’s one-page tax reform plan issued in April set out four goals:
- 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
He also laid out general goals for individual and corporate reform that included reduction in the number and percentage of tax brackets, simplification to include eliminating targeted tax breaks that benefit wealthy tax payers, repeal of the death tax and a 15% business tax rate among other reforms. The proposal in its entirety is included in the download available by clicking the PDF icon above.
The process for developing the specific details for his proposal and moving it forward includes listening sessions with stakeholders and continued work with the House and Senate to develop legislation that can pass both chambers. It’s that “work with the House and Senate” part that is proving to be most time consuming, but that’s nothing new. While Benjamin Franklin said, “In this world, nothing can be said to be certain, except death and taxes,” we wonder if he should have added “…and endless debate.”
In 1986 – the last time comprehensive tax reform was passed – it took three years of negotiation, bipartisan cooperation and many near-misses to make substantial tax reform a legislative reality. Today, 31 years later, the bipartisan cooperation and resolve to implement such tax reform (or simplification as the current case may be) doesn’t seem to exist and the Republican majority doesn’t show promise of reaching agreement with their own members. With debate set to start after Labor Day, getting substantial changes passed this year seem optimistic. However, we’ve witnessed Congress implement significant tax changes at year-end on occasion and they have even passed some tax legislation after year-end and grandfathered the changes in for the prior year. All hope is not lost.
For planning purposes, however, we are counseling our clients to stay the course. It is prudent to plan for the tax rules that exist rather than for those that we anticipate seeing passed at some nebulous future date. In the event we see a strong indication that significant changes are likely to be passed, we will quickly communicate those changes and how we will work with you to address them.
What we do expect to see pass this year is some type of healthcare reform legislation. As of this writing (June 7, 2017), the House has passed its version of health care reform and the Senate is expected to vote on their version before the August recess. Look for an update from us on health care reform for businesses and individuals when a final version is passed.
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