By: Lee Zimet, CPA, J.D., LL.M.
Starting in 2017, the Republican Party will control the Presidency and both houses of Congress. As a result, it appears reasonably likely that tax reform legislation will become law in 2017. Both parties have been discussing the need for tax reform in recent years, but various forces and obstacles have prevented any of the proposals from becoming law.
President-elect Donald J. Trump proposed a comprehensive tax reform plan during his successful campaign (the Trump Plan). Many of the proposals in the Trump Plan are based upon proposals that were previously made by House Speaker Paul Ryan in his Better Way Tax Plan.
Below is an analysis of the Trump Plan. According to Mr. Trump's campaign website, the intent of the plan is to:
- Provide a "massive tax reduction" for working and middle-income taxpayers;
- Ensure that the rich pay their fair share of taxes;
- Encourage domestic investment and economic growth;
- Eliminate special interest loopholes; and
- Reduce the cost of childcare and eldercare by providing tax subsidies.
If enacted, the Trump Plan should accomplish these goals by lowering the tax rates for both individuals and businesses and eliminating many deductions and credits.
