Trump Tax Plan Announced

April 26, 2017
This afternoon, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn announced the principles of the Trump Administration’s proposal for tax reform:

Individual Taxation
  • Reducing number of tax brackets from 7 to 3—10 percent, 25 percent, and 35 percent brackets
  • Standard deduction increased to $24k for married couples
  • Repealing AMT
  • Return top capital gains and dividend rate to 20 percent by getting rid of 3.8 percent Obamacare Tax
  • Repealing Estate tax
  • All personal deductions will be eliminated other than mortgage interest and charitable contribution (that includes deduction for state and local taxes and deduction for healthcare); unclear on investment-related expenses such as investment interest
Business Taxation
  • A reduction in the corporate tax rate to 15 percent
  • A similar reduction in the effective tax rate for small and medium sized businesses (implying passthroughs) to 15 percent (unclear how this will be structured)
  • A one-time repatriation tax on all offshore earnings of U.S. corporations (the exact rate still being negotiated with Congress)
  • A switch to a territorial system of international taxation
  • No mention of (i) border adjustment, (ii) interest deductibility or capex expensing, or (iii) revenue neutrality