News & Publications
Trump’s Big Tax Plan Outlined
On April 26, 2017, President Donald Trump presented a one-page outline of his administration’s tax reform plan. From his campaign trail days, Trump vowed to reform taxes for not only the working class individual but also for corporate America. Seizing the opportunity, the President is leading what is being labeled as the most significant tax reform since the Reagan era when President Ronald Reagan signed the Tax Reform Act of 1986. The Administration claims this will be one of the biggest tax cuts in American history.
The one-page plan, titled 2017 Tax Reform for Economic Growth and American Jobs, is a summary of the items that are areas of focus. These areas include goals for both individual and business reform as well as the process for reaching the goals.
The plan’s four goals of tax reform are to:
1. “Grow the economy and create millions of jobs
2. Simplify our burdensome tax code
3. Provide tax relief to American families – especially middle-income families
4. Lower the business tax rate from one of the highest in the world to one of the lowest”
The plan for individual tax reform involves a reduction of the number of tax brackets from 7 to 3 (10%, 25%, and 35%). The standard deduction would be doubled from $12,000 per couple to $24,000. Tax relief provisions for child and dependent care expenses would remain for families.
The process of income tax reporting would be simplified by repealing the death tax, Alternative Minimum Tax, and targeted tax breaks primarily benefiting the wealthy. Home ownership and charitable giving would be protected as tax deductions. Additionally, the 3.8% Obamacare tax that affects small businesses and investment income would be repealed.
The plan for business tax reform includes a 15% business tax rate, down from 35% for most corporations and 39.6% for owners and shareholders of pass-through businesses; a one-time tax on “trillions of dollars held overseas”; elimination of tax breaks for special interests; and creation of a “territorial” tax system to even the playing field for American businesses.
During the month of May, the Trump Administration will begin conducting feedback sessions with stakeholders and will work with the House and Senate to craft specific details of a plan that will provide such huge tax relief. The Administration’s goal is to not only provide massive tax relief but also to create jobs and make America more competitive. Subtitled as “The Biggest Individual and Business Tax Cut in American History”, such a plan will need to pass both chambers of US government.
Tax Reform Elevated on the Agenda
Comprehensive US tax reform has been a longstanding priority. One of the most complex in the world, the current US federal tax code consists of over 74,000 pages. By comparison, it was only 27 pages at inception in 1913 and 26,300 in 1984. Coupled with its length is its complexity. It is now full of perks and benefits to select special interest groups and other socio-economic influences giving rise to loopholes and elimination or reduction of tax for certain parties. US businesses spend $150 billion annually complying with the US tax code, and 90% of Americans seek professional assistance in filing their personal income taxes. Benefits of tax reform include efficiencies in tax collection, application, and reporting.
Tips for the Taxpayer
With the initial one-page plan outlined, it seems evident that many big changes are on the way. As a tax and trade professional, these are exciting times. It is the time that one must keep abreast of the ever-changing policy and potential acts that may impact us an individuals and businesses.
Stay up-to-date with the latest tax and trade news and legislation. Look for planning opportunities and exemptions that might be applicable to your company. For information, please feel free to contact tax@allynintl.com. If you are interested in learning more about this topic or other tax topics and Allyn Tax services, please visit our Tax Publications under News and Publications at www.allynintl.com.
How Allyn Can Help
Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.
Allyn files state and local sales and use tax and property tax returns in every US taxing jurisdiction. We can manage your tax compliance, create a solid tax process, and provide audit defense for your company. Allyn acts as your entire outsourced tax department and provides support on a project-level basis such as through reverse use tax audits and exemption certificate management as well as many other tax services.
Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: tax@allynintl.com.
Trisha Davidson, CMI
About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, FL U.S.A, Shanghai, P.R. China and Prague, Czech Republic. For more information, log on to www.allynintl.com.
Sources Referenced
http://money.cnn.com/2017/04/26/news/economy/trump-tax-plan/
https://www.nytimes.com/2017/04/26/us/politics/trump-tax-cut-plan.html
http://www.cnn.com/2017/04/26/politics/white-house-donald-trump-tax-proposal/
http://www.journalofaccountancy.com/news/2017/apr/trump-tax-priorities-tax-reform-201716547.html
https://www.cch.com/wbot2013/factsheet.pdf