On April 26, 2017, the Administration released its long-awaited “tax reform” plan. While the President touted it as “the biggest … tax cut in American history” the 2-page document released by the Administration seemed to be little more than a re-packaging of previously-published campaign promises.
The document’s general proposals contain no specific information but the following are the highlights:
It is not clear whether the proposal would be revenue neutral, although the similar Trump campaign plan was estimated to cost between $4.4 - $6.2 trillion. A revenue-losing plan will be difficult to make it through Congress without either Democratic votes in the Senate or making the tax cuts temporary. The distributional effects of the plan (the benefits appear to be skewed in favor of higher-income taxpayers) could also create political problems for the plan’s success.
The package does not include infrastructure programs, a child care tax credit, and other items, which could be introduced in later months. It also does not include either the border adjustment tax, which is a major feature of the plan advanced by Republican leadership in the House of Representatives, or corporate integration (i.e., elimination of the second-layer of corporate income taxation), which has been advanced by influential Republican members of the Senate Finance Committee. As a result, the plan’s prospects in Congress appear to be uncertain at best.
The tax experts at True Partners Consulting will continue to closely monitor the progress of tax reform in the coming weeks and months and will be providing numerous updates both through our regularly-published Washington Tax Insight and through periodic webinars. As always, we are prepared to discuss the impact of the various tax reform proposals on our clients’ individual situations as requested.
John V. Aksak
Northeast Managing Director
John P. Bennecke
Robert M. Gordon
Managing Director &
Assistant General Counsel
Ross J. Valenza