Are the Republicans doing the same thing on their new tax plan that they did with healthcare? They have parts of a tax plan but no one knows?
whats in it. They did their homework but the dog ate it.
- Anonymous3 years agoFavorite Answer
If you would really like to know.
2017 TAX REFORM: PRESIDENT TRUMP AND "BIG SIX" REVEAL FRAMEWORK OF TAX REFORM PLAN
Unified Framework for Fixing Our Broken Tax Code (Sept. 27, 2017)
Highlights of the Unified Tax Reform Framework (Sept. 27, 2017)
The Trump Administration and select members of Congress have released a "unified framework" for tax reform. The document provides more detail than a number of other tax reform documents that have emerged from the Administration over the past few months, but it still leaves many specifics to be worked out by the tax-writing committees (i.e., the House Ways and Means Committee and the Senate Finance Committee).
The framework is the result of several months of discussion among the so-called "Big Six"—House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, White House adviser Gary Cohn, House Ways & Means Committee Chairman Kevin Brady (R-TX), and Senate Finance Committee Chairman Orrin Hatch (R-UT).
It contains many familiar items and themes, including some from the House Republicans' "A Better Way" blueprint issued last summer (Weekly Alert ¶ 41 06/30/2016), and some from various proposals made by the President (Weekly Alert ¶ 1 09/07/2017; Weekly Alert ¶ 1 06/01/2017).
Individual tax reforms. Individual provisions in the framework include:
Increased standard deduction; elimination of personal exemptions and additional standard deductions for older/blind taxpayers. The framework would increase the standard deduction to $24,000 for married taxpayers filing jointly, and $12,000 for single filers. "The additional standard deduction [for blind or elderly taxpayers] and personal exemptions for the taxpayer and spouse are consolidated into this larger standard deduction."
RIA observation: There is no provision for heads of household under the framework. Presumably, heads of household would be "single".
RIA observation: Some taxpayers would be positively affected by this change, but not all. For instance, under current law, non-itemizing married taxpayers with no dependents filing jointly can claim a standard deduction of $12,700 and a personal exemption of $4,050 each for 2017 (total $20,800). On the other hand, a non-itemizing head of household with three dependent children can claim a $9,350 standard deduction and four personal exemptions for 2017 (total $25,550).
Reduced number of tax brackets. The framework would reduce the number of tax brackets from seven to three: 12%, 25%, and 35%. Under current law, the lowest tax bracket is 10%, and the highest is 39.6%.
The framework states that "[t]ypical families in the existing 10% bracket are expected to be better off under the framework due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process".
The framework also leaves open the possibility that "[a]n additional top rate may apply to the highest-income taxpayers to ensure that the reformed tax code is at least as progressive as the existing tax code".
Child tax credit "enhanced", and non-child credit provided. The framework states that it "significantly increases" the child tax credit, but doesn't specify the increased amount. The first $1,000 of the credit would be refundable, as under current law. Additionally, the income levels at which the credit phases out (currently, $110,000 for joint filers, $75,000 for unmarried individuals, and $55,000 for married taxpayers filing separately) would be increased, to unspecified amounts.
The framework would also provide a non-refundable credit of $500 for "non-child dependents".
AMT repealed. The framework calls for repealing the individual alternative minimum tax (AMT).
Itemized deductions largely eliminated; home mortgage interest & charitable contributions retained. The framework would eliminate "most" itemized deductions, but would retain tax incentives for home mortgage interest and charitable contributions. The documents states that these particular benefits “help accomplish important goals that strengthen civil society, as opposed to dependence on government".
RIA observation: Among the deductions that would be eliminated under the framework is the state and local tax deduction.
Work, education and retirement benefits retained. The framework would retain "tax benefits that encourage work, higher education and retirement security". However, the tax-writing committees are "encouraged" to make these tax benefits simpler and more effective.
Estate and generation-skipping transfer taxes repealed. The framework calls for the repeal of both the estate tax and the generation-skipping transfer tax.
Business tax reforms. Business tax provisions in the framework include:
New top rate for "small" pass-throughs. Under the framework, the maximum tax rate applied to the business income of "small" and family-owned businesses conducted as sole proprietorships, partnerships and S corporations would be 25%. The framework "contemplates that the committees will adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate".
New corporate tax rate. The framework would reduce the corporate tax rate to 20% (down from the current top rate of 35%). It also "aims" to eliminate the corporate AMT. Further, the committees "also may consider methods to reduce the double taxation of corporate earnings".
Full expensing for five years. The framework would allow businesses to immediately write off (i.e., expense) the cost of new investments in depreciable assets other than structures that are made after Sept. 27, 2017, for at least five years.
Interest expense deductions. The deduction for net interest expense incurred by C corporations would be "partially limited" under the framework (without further details as to what this means). The tax-writing committees are instructed to consider how interest should be treated by non-corporate taxpayers.
Most deductions and credits repealed; but research and low-income housing credits retained. The framework states that, because of the rate reduction for businesses, the Code Sec. 199 domestic production activities deduction (DPAD) would no longer be necessary. It also provides that "numerous other special exclusions and deductions" would be repealed or restricted. However, the framework would retain the research credit and the low-income housing tax credit (LIHTC). It also leaves open the possibility of the committees retaining other business credits "to the extent budgetary limitations allow".
"Special tax regimes". The framework, stating that certain industries and sectors are governed by special tax rules, says that such rules will be "modernize[d]... to ensure that the tax code better reflects economic reality and that such rules provide little opportunity for tax avoidance".
RIA observation: It is not entirely clear which "rules" are the target of the above provision.
International tax reforms. International tax provisions in the framework include:
Foreign dividend exemption; repatriation. The framework would provide for a 100% exemption for dividends from foreign subsidiaries, defined as companies in which the U.S. parent owns "at least a 10% stake". To transition, the framework would treat accumulated offshore profits as repatriated, giving rise to a one-time repatriation tax (at an unspecified "low" rate) that could be paid over five years. Accumulated foreign earnings "held in illiquid assets" would be subject to a lower tax rate than foreign earnings held in "cash or cash equivalents".
RIA observation: The above provisions fall under a heading "Territorial Taxation of Global American Companies".
Anti-erosion rules. The framework includes rules that would "protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations".
RIA observation: This description seems to indicate that a minimum tax would be imposed to reduce the incentive for firms to avoid U.S. tax by shifting profits overseas (i.e., to a low- or no-tax jurisdiction).
Next steps. Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said his plan was to turn the framework into legislation to be passed by the end of this year.Source(s): Faithless is a CPA.
- Anonymous3 years ago
I'm GLAD the dog ate the homework.
I hope the dog pukes up the homework, eats it again, then craps it out on the White House lawn.
- BoxLv 63 years ago
im sick of excuses. Trump better get this doneSource(s): still waiting for that wall...
- MardukLv 73 years ago
Most know that the 1% will get a big tax cut and the 99% will pay for it.
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- Anonymous3 years ago
Yes. I pay their salary and they are sloppy.
- Anonymous3 years ago
Well Bob, is that what CNN told you? I bet it is. Now put on your pointy hat and white sheet and go play in Chicago.
- Anonymous3 years ago