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Report Card on our President’s First Hundred Days

Tax reforms won’t likely be enacted in President Trump’s first 100 days in office. Per interviews with CNBC and Fox Business News, U.S. Treasury Secretary Steven Mnuchin expects a new tax law to be signed during the dog days of summer.

“We want to get this done by the August recess. We’ve been working closely with the leadership in the House and the Senate and we’re looking at a combined plan,” said the former hedge fund manager.

During his campaign, Trump vigorously stumped for major tax reform, along with overhauling the tax system, including proposals to cut income taxes and stimulate business growth.  Details of his plan will likely be revealed in the upcoming weeks.

The House GOP leadership issued its own “blueprint” for tax reform last year. As a component of that plan, border adjustment tax on imports will also be considered by the nation’s lawmakers.

As mentioned by both President Trump and/or the House Republicans, the following provisions may ultimately be included in tax reform legislation:

  • Income tax rate cuts including a reduction from seven to three tax brackets;
  • Repeal of the alternative minimum tax (AMT);
  • A cap on the dollar amount of itemized deductions;
  • Elimination of personal exemptions and an increase in the standard deduction;
  • Revision of rules for dependency exemptions and child care expenses;
  • Enhancement of the Section 179 deduction for business property;
  • A reduction in the top corporate income tax rate to 15 percent;
  • Special tax breaks for manufacturing firms;
  • A one-time repatriation tax to discourage tax inversions; and
  • Repeal of the estate tax accompanied by revisions in the step-up in basis rules.

Sentiment for significant change remains strong. “Tax reform is our number one objective. We think it’s absolutely critical [for] economic growth,” said Mnuchin.  “Trillions of dollars offshore will come back and this will create jobs [and] investment and we need to make sure our U.S. businesses are competitive.”

The Treasury Secretary continues reiterating the contention of the Trump administration: tax reform should not be dependent on tax revenue without taking economic growth into account. Detractors from both sides of the aisle express concerns that proposed reforms would only add to the growing budget deficit. Naturally, agreements worked out in the back rooms of Congress may depend on the specific numbers used and computed.

If parts of these reforms are enacted, they could result in significant tax savings for businesses!

Should you need advice on how to maximize your tax deductions, the tax accountant team at Patrick & Robinson CPAs remain ready to help. Contact us at 904-396-5400 or Office@CPAsite.com.

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