Trump Unveils Tax Reform OutlineApril 27, 2017
Yesterday, the Trump Administration released an outline on tax reform and simplification. Unveiled by Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, the outline was a one-page document focusing on corporate tax reform and individual income tax rate cuts. Notably, Secretary Mnuchin stated during the press conference that the forthcoming, more detailed proposal would include a tax cut for pass-through businesses on-par with the corporate tax rate cut.
Among the key tax changes the outlined highlighted:
- Reduce the current seven individual income tax brackets down to three with rates at 10 percent, 25 percent and 35 percent;
- Lower the corporate tax rate from 35 percent to 15 percent;
- Lower the tax rate on pass-through entities (which comprise the overwhelming majority of small businesses and which currently pay taxes at the individual income level) to 15 percent;
- Double the standard deduction for individuals;
- Eliminate the estate tax and alternative-minimum tax;
- Eliminate nearly all tax deductions except for mortgage interest, retirement savings and charitable giving.
NSBA provided immediate reaction to the outline yesterday, below is a statement from NSBA President and CEO Todd McCracken.
“The number-one tax-reform related concern of small businesses today is the possible elimination of deductions and credits without an offsetting reduction in tax rates, something Secretary Mnuchin said the proposal would address.
“We appreciate the administration’s understanding of how most small businesses pay taxes, which is reflected in this proposal. There remains a good deal of details still needed, including how such a cut would impact the overall U.S. debt – something with which NSBA’s members also are concerned.
“According to NSBA’s annual taxation surveys, the biggest issue concerning federal taxes is complexity—not the actual financial burden. We hope that, as this proposal—or any other proposals—continue to develop into legislation, easing complexity will be a top priority.
“Unfortunately, no matter how positively a tax proposal will impact small business, it’s got to have enough Congressional support to move. Today, we have the first real chance for broad tax reform in a generation, however the overwhelming majority of small businesses believe political failures—partisanship and a lack of effort—are the biggest challenge facing reform, and one-third don’t believe tax reform will ever be enacted.”
Please click here to download NSBA’s recently-released 2017 Small Business Taxation Survey.