President Trump Releases One Page Tax Outline

Last week, President Trump released his tax reform outline which would include the biggest cuts and changes in 30 years, but also does not outline how the cuts will be paid for. The President says that “growth” will cover the costs of the tax cuts.

His plan would reduce the number of total individual rates from seven to three (10%, 25% and 35) and the top rate would drop from 39.6 percent to 35 percent, and the top tax rate for all businesses would drop to 15 percent. Because Trump has not specified how much income would apply to each of the rates it's impossible to say what the change would really mean, however we do know that the proposal calls for doubling the standard deduction.

A 15 percent rate would be a huge drop from the 39.6 percent top rate paid by owners and shareholders of pass-through businesses. In a pass-through business, the owners and shareholders report profits on their personal tax returns. PMAA Gold Partner Patriot Capital has done their own analysis on possible tax changes. Click here to review it.

The President is also calling for a territorial system for businesses, meaning U.S. companies would only owe U.S. tax on what they earn in the United States. There would be a one-time 10 percent levy on U.S. overseas profits. He did not propose a border adjustment tax which is sought by House Republicans and is highly controversial. Trump concurs with House Republicans in his proposal to eliminate all deductions except those for mortgage interest and charitable contributions. Trump’s proposal would also repeal the Alternative Minimum Tax and the 3.8 percent Affordable Care Act tax on investment income. Finally, a huge gain for many petroleum marketers would be Trump’s proposed repeal of the estate tax.