White House and GOP Leaders Release Outline of Tax Reform Plan

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By CohnReznick LLP

The White House and top GOP leaders released their tax reform outline yesterday, as President Trump plans to unveil the new Republican tax-reform plan this afternoon at the Farm Bureau Building in Indianapolis. 

The President plans to position the tax reform proposal as a populist plan, especially beneficial for low-income earners. Republicans plan to collapse the number of brackets from seven to three. The standard deduction would nearly double to $12,000 for a single filer and $24,000 for married couples, meaning President Trump can accurately argue that many more low income earners would pay no tax under his plan.

This is the first volley towards an aggressive push to pass a tax reform plan with a very short legislative calendar for 2017. There is still some debate as to whether the outline released yesterday fully aligns with President Trump’s objectives. For example, the President continues to call for a 15% corporate rate versus the 20% rate proposed in the plan. 

There will be continued debate over the plan once the House and Senate tax writing committees review the revenue effects of the plan. Revenue neutrality remains a goal of Senate Finance Chairman Orrin Hatch, whose focus is clearly on the international reforms contained in the outline. We will continue to keep you informed on how this tax plan unfolds this fall. 

What Does CohnReznick Think?

The outline released yesterday is an overview of the more significant proposals being discussed at this time.  The final proposed legislation may differ considerably from what will ultimately be enacted. Given the possibility that tax reform may occur in the next year or so, individuals and businesses should monitor the tax reform proposals and developments, assess how such proposals will affect their particular facts and circumstances and incorporate the significant tax law changes into current planning.  We will continue to monitor the latest legislative developments surrounding tax reform.

Read our full alert, which outlines a summary of the tax reform, click here.