The Trump administration’s long-awaited tax reform plan resurrects campaign proposals to tax businesses at a 15 percent rate and simplify individual taxes by eliminating most itemized deductions while doubling the standard deduction.

 The plan’s reception among policy observers was mixed, with many expressing concern that it lacked detail or that details available so far imply a final product that will hemorrhage revenue.

Cohn acknowledged that many details — such as income thresholds for individual tax brackets and the treatment of freelance contractors — remain to be determined.

While the tax plan sheds some new light on the administration’s tax positions, much of it appears to be a rehash of what Trump proposed during the campaign.

 “Somewhat surprisingly, this plan is even shorter, and contains even less detail, than the plan he campaigned on,” Saba Ashraf of Ballard Spahr LLP told Tax Analysts. There are no dramatic differences between what Trump proposed as a candidate and what he’s proposing as president, and the few noteworthy differences that are there come mostly on the individual tax side, she said.

Ashraf noted that Trump’s earlier tax plan proposed capping itemized deductions at $100,000 for individual filers and $200,000 for joint filers, while the current plan proposes to eliminate almost all deductions. She also pointed out that the White House’s new proposed standard deduction expansion would mark a decrease from the $30,000 limit Trump proposed during the campaign. Doubling the tax break, as the latest outline calls for, would allow couples to deduct up to $25,700 for 2017, though Cohn cited a figure of $24,000.

Read the full article here. Subscription may be required.


People

Related Areas

Tax