President Trump announced the long-awaited framework that would cut individual and corporate tax rates and eliminate many exemptions and deductions. The “Big Six” (Speaker of the House Paul Ryan, House Ways and Means Committee Chair Kevin Brady, Senate Finance Committee Chair Orin Hatch, Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, and National Economic Council Director Gary Bohn) negotiated the “Unified Framework for Fixing Our Broken Tax Code” which would be the biggest tax overhaul since the 1980’s.
The framework is expected to be used as a guide for items to be included in future legislation. The specifics have yet to be determined. The framework includes many of the proposals that have been tossed about over the past year, such as:
- lower corporate tax rates, from 35% to 20%
- partial limitation of interest expense deductions for corporations,
- full expensing of equipment purchases for 5 years
- reduced number of individual tax brackets 3, 12%, 25%, and 35%
- elimination of personal exemptions and many itemized deductions including state and local taxes and miscellaneous deductions
- increased standard deduction, $12,000 for individuals and $24,000 for married couples
- repeal of the Alternative Minimum Tax
- repeal of the estate and generation-skipping transfer tax
This is just the beginning, but looks like this may be a good start for significant reform . . .