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Yesterday, the White House released President Donald Trump's tax reform plan to the public. The proposal aims to drastically cut corporate taxes as well as provide tax relief for individuals, with middle-income families as the primary target. The goal of the tax reform is to create economic growth, and American jobs, and to lower the business tax rate to one of the lowest in the world. The proposed tax reform plan is being touted as one of the biggest individual and business tax cuts in American history. 

Individual reform

  • Reduces the existing seven tax brackets to three (10%, 25% and 35%)
  • Doubles the standard deduction
  • Tax relief for families with child and dependent care expenses
  • Maintains the home interest and charitable deductions while eliminating other deductions
  • Repeal the alternative minimum tax
  • Repeal of the estate tax

Business reform 

  • 15% tax for corporations and flow-through entities
  • Territorial tax system to make American companies competitive 
  • One time tax on trillions of repatriated offshore dollars
  • Eliminate tax breaks for special interest

What was missing - the border adjustment tax that Speaker of the House Ryan and others have proposed.

The proposal is very high level and lacks detail. There's still much to be negotiated with Congress, which may ultimately lead to a tax reform package that is different from the President's current proposal. However, by presenting this proposal, the President is delivering on his campaign promise of addressing tax reform. To discuss long term tax strategies contact your local UHY LLP professional.