Alex Hendrie

ATR Supports Rep. Roskam's "Preventing IRS Abuse and Protecting Free Speech Act"

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Posted by Alex Hendrie on Wednesday, February 7th, 2018, 1:22 PM PERMALINK

Today, ATR released a letter in support of Congressman Peter Roskam's H.R. 4916, the Preventing IRS Abuse and Protecting Free Speech Act. This important legislation prevents the IRS from targeting non-profits by prohibiting the agency from collecting the identity of donors who contribute to these organizations.

Protecting free speech is an issue that should be supported by members and groups regardless of political affiliation. The Preventing IRS Abuse and Protecting Free Speech Act should be a key part of the effort to reform the IRS and protect political free speech.

The full letter can be viewed here and below. 

Dear Congressman Roskam:

I write in support of H.R. 4916, the Preventing IRS Abuse and Protecting Free Speech Act. This important legislation prevents the IRS from targeting non-profits by prohibiting the agency from collecting the identity of donors who contribute to these organizations.

Under current law, the IRS requires non-profits to submit a Schedule B form, listing the names and addresses of their donors. While the agency collects this sensitive information, it does not use it for any purpose.

Instead, this form needlessly imposes compliance costs on both non-profits and the IRS, while also giving unelected bureaucrats a tool to chill political speech.

This concern is not hypothetical - there have been several cases where agency officials have leaked the sensitive information contained on Schedule B forms for political purposes. IRS officials have even publically doubted the need for Schedule B forms given that there is no need to collect this information, and the risk of this information becoming public.

There is a clear need to reform the IRS to better protect free speech. There have been well documented cases of the agency targeting political speech under the Obama Administration, most notably when IRS employee Lois Lerner led an effort to deny non-profit status to conservative organizations. Years after this scandal, it is unclear whether sufficient protections are in place.

For instance, a 2016 recent report by the Government Accountability Office warned that the IRS may still be unfairly targeting Americans based on political beliefs. As the report noted, serious internal control flaws mean the IRS may still be unfairly selecting Americans for an audit “based on an organization’s religious, educational, political, or other views.”

Protecting free speech is an issue that should be supported by members and groups regardless of political affiliation. Refusing to act against IRS abuse opens the door to future administrations doing the same regardless of whether they are Democrat or Republican.

The Preventing IRS Abuse and Protecting Free Speech Act should be a key part of the effort to reform the IRS and protect political free speech. All Members of Congress should support this important legislation.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

Photo Credit: Gage Skidmore


ATR Opposes Increase in Passenger Facility Charge

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Posted by Alex Hendrie on Monday, February 5th, 2018, 1:29 PM PERMALINK

In letters to Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan, Americans for Tax Reform wrote in opposition to an increase in the Passenger Facility Charge (PFC). While many airports have claimed that a PFC increase is necessary to continue infrastructure projects, this is simply not the case.

Airports already enjoy strong cash flow and revenue, and government taxes and fees already overburden airline passengers. Lawmakers should oppose a PFC increase whether it is considered as standalone legislation or part of a larger government funding bill. A PFC increase is not needed to finance airport investment, would fall squarely on travelers, and goes against regular order.

A copy of the letter sent to Speaker Ryan can be viewed here.

A copy of the letter sent to Leader McConnell can be viewed here. 

[See also: ATR letters to Senator Collins, Senator Daines, Senator Alexander, Senator Blunt, Senator Capito, Senator Shelby, Senator Hoeven, Senator Graham, Senator Boozman]

Photo Credit: Ron Cogswell


ATR Urges Treasury Secretary Mnuchin to Index the Calculation of Capital Gains Taxes to Inflation

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Posted by Alex Hendrie on Tuesday, January 23rd, 2018, 11:54 AM PERMALINK

ATR President Grover Norquist today urged Treasury Secretary Steve Mnuchin to index the calculation of capital gains taxes to inflation. As the letter notes, there are clear economic benefits, strong legal precedent, and historic congressional support for indexing capital gains taxes to inflation.

The full letter is below and can be found here

January 23, 2018

Dear Secretary Mnuchin:

I urge you to use your authority to modify the calculation of capital gains taxes to include an inflation adjustment. There are clear economic benefits, strong legal precedent, and historic congressional support for indexing capital gains taxes to inflation.

President Trump and Congress passed a bold, pro-growth tax reform bill late last year. However, because of legislative constraints, the bill could not contain every tax cut that Republicans have campaigned on. 

The next step should be Treasury delivering a significant tax cut by using its regulatory authority to add an inflation adjustment to the calculation of capital gains taxes. Treasury’s authority to enact this tax cut has been analyzed by lawyers Charles J. Cooper, Michael A. Carvin and Vincent Colatriano in a 1993 legal memo published in Virginia Tax Review, and again by Cooper and Colatriano in a 2012 legal memo published in the Harvard Journal of Law and Public Policy. 

This tax cut would have a strong, positive effect on the economy and will benefit millions of Americans that invest in the stock market, or own a 401(k) or IRA. This tax cut would also not require a Congressional Budget Office (CBO) score and would not need to be voted on by Congress.

Under current law, the capital gains tax fails to account for gains that are based on inflation. This unfairly exposes taxpayers to additional taxation. For example, an investor makes a capital investment of $1,000 in 2000 and sells that investment for $2,000 in 2017 will be taxed for a $1,000 gain at a top capital gains tax rate of 23.8 percent. After adjusting for inflation, the “true gain” is much lower – just $579. (1,000 in 2000 - $1,421 in 2017).

According to a 2013 analysis by the Tax Foundation on individual capital gains taxes, the average effective rate excluding gains from inflation between 1950 and 2012 was 42.5 percent, nearly twice today’s 23.8 percent top capital gains tax rate. 

Treasury has the legal authority to index the calculation of capital gains taxes to inflation. Under the precedent set by the Supreme Court in Chevron U.S.A. v. National Resources Defense Council (1984), the ability of Treasury to add an inflation adjustment hinges on whether a new definition of “cost” is plausible. Currently, the capital gains tax is calculated as the difference between the cost of the asset and the sale price of the asset. 

While in this context, “cost” is commonly understood to mean historical cost, this definition is not explicitly enshrined in law and Treasury has utilized regulatory discretion in the past. For instance, in 1918, Treasury decided that an asset’s cost was not strictly purchase price but was purchase price less depreciation and depletion taken by the taxpayer prior to sale.

Recent legal precedent proves that there is precedent for the term “cost” to include inflation. For instance, in Verizon v. FCC (2002) the Supreme Court affirmed that the term “cost” was ambiguous and the use of historical cost was not required by law. National Cable & Telecommunications Ass’n v. Brand X Internet Services (2005), affirmed the right of an agency to interpret an ambiguous provision of the law, while in Mayo Foundation for Medical Education & Research v. United States (2011)the Supreme Court affirmed that the Chevron doctrine applies to Treasury regulations.

There is also significant congressional support for indexing the calculation of capital gains taxes to inflation. In 2007, then-Congressman Mike Pence introduced legislation to index capital gains taxes to inflation. This legislation was co-sponsored by now-Office of Management and Budget Director Mick Mulvaney, House Speaker Paul Ryan (R-Wis.) and House Ways and Means Chairman Kevin Brady (R-Texas). 

Given the clear economic rationale, strong legal precedent, and significant congressional support for indexation, I urge Treasury to swiftly utilize its regulatory authority and index capital gains taxes to inflation. 

Sincerely,
 

Grover G. Norquist 
President
Americans for Tax Reform

                        Cc:

The Honorable Donald J. Trump
President of the United States
1600 Pennsylvania Avenue, N.W. 
Washington, D.C. 20500

The Honorable Kevin Brady
Chairman, Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

The Honorable Orrin G. Hatch
Chairman, Committee on Finance
U.S. Senate
219 Dirksen Senate Office Building
Washington, D.C. 20510

Photo Credit: By Vice President Pence

More from Americans for Tax Reform


23 Conservative Groups Support Delaying Obamacare Taxes

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Posted by Alex Hendrie on Wednesday, January 17th, 2018, 1:00 PM PERMALINK

In an open letter to Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, 23 conservative groups wrote in support of efforts to delay the implementation of Obamacare taxes. If lawmakers do not delay these Obamacare taxes, premiums will skyrocket and middle class families, seniors, and small businesses will be severely impacted. 

Eventually, all Obamacare taxes should be completely repealed, but delaying their implementation through a continuing resolution is a good start.

The full text of the letter can be found here and is below:

Dear Speaker Ryan & Leader McConnell:

We write in support of efforts to offer tax relief to American families through delay of Obamacare taxes.

Recent media reports suggest that Congress is considering passing one or two year relief of the health insurance tax, five years of relief from the medical device tax, and one additional year of relief from the Cadillac Tax, as part of a continuing resolution to fund the federal government. 

If lawmakers fail to act, these taxes will lead to higher premiums and higher costs for middle class families, seniors, and small businesses.

Over the long-term, lawmakers must continue working to repeal all one trillion in Obamacare taxes as part of reforms that increase access to care, lower costs, and get the government out of health care.

In the meantime, lawmakers should ensure temporary relief from as many Obamacare taxes as possible.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

James L Martin
Founder/Chairman, 60 Plus Association

Phil Kerpen
President, American Commitment

Lisa B. Nelson
CEO, ALEC Action

Dan Weber
President, Association of Mature American Citizens

Norm Singleton
President, Campaign for Liberty 

Andrew F. Quinlan
President, Center for Freedom and Prosperity

Olivia Grady
Senior Fellow, Center for Worker Freedom

Jeffrey Mazzella
President, Center for Individual Freedom

Tom Schatz
President, Council for Citizens Against Government Waste

Katie McAuliffe
Executive Director, Digital Liberty

Palmer Schoening
President, Family Business Coalition

Jason Pye
Vice President of Legislative Affairs, FreedomWorks

George Landrith
President, Frontiers of Freedom

Carrie L. Lukas
Independent Women's Forum 

Heather R. Higgins
Independent Women's Voice

Brandon Arnold
Executive Vice President, National Taxpayers Union

Lorenzo Montanari
Executive Director, Property Rights Alliance

Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council

David Williams
President, Taxpayers Protection Alliance

Jenny Beth Martin
Chairman, Tea Party Patriots Citizens Fund

Nancy Piotter
Executive Director, Virginians for Quality Healthcare

Amy Kremer
Co-chair, Women for Trump

Photo Credit: Stephen Melkisethian


Norquist Hails House Passage of Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Tuesday, December 19th, 2017, 4:17 PM PERMALINK

ATR President Grover Norquist released the below statement following House Passage of the Conference Report to the Tax Cuts and Jobs Act:

“The Tax Cuts and Jobs Act is a hugely pro-growth, pro-family bill that cuts taxes for American families and businesses. This bill doubles the standard deduction, reduces income tax rates for all Americans, makes 529 accounts available to every American to save for education at all levels, and removes tax barriers to job creation here in the United States.

“The House should be congratulated for passing this historic legislation. The Senate should swiftly take up and approve this legislation.

“This landmark achievement would not have been possible without the work of House Speaker Paul Ryan, Ways and Means Chairman Kevin Brady and members of the Committee.”

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KEY VOTE: ATR Urges “YES” Vote on Conference Report to H.R.1, the Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Monday, December 18th, 2017, 9:07 AM PERMALINK

The Tax Cuts and Jobs Act will create millions of American jobs and higher wages AND simplify and lower taxes on Americans at every income level

ATR Urges a YES vote.

Later this week, members of the House and Senate will vote on the conference report to H.R. 1, the Tax Cuts and Jobs Act. ATR urges a YES vote on this pro-growth, pro-family legislation.

This legislation offers tax reduction and simplification for families, individuals, small businesses, and corporations. Over the next decade, the Tax Cuts and Jobs Act reduces taxes by $5.5 trillion and eliminates $4 trillion worth of distortionary credits and deductions.

H.R. 1 simplifies the tax code so most Americans can file on a postcard and offers tax relief for Americans at every income level. Under this plan, a family of four with the nationwide median income of $73,000 will receive a tax cut of $2,059.

The Tax Cuts and Jobs Act will also grow the economy leading to increased take-home pay and the creation of new or better jobs for families across the country.

In addition, the Tax Cuts and Jobs Act ends the Obamacare mandate tax paid by millions of Americans -- 80% of whom earn less than $50,000 – and allows responsible production of oil in Alaska.

By voting YES on the Tax Cuts and Jobs Act, members of the House and Senate have a rare opportunity to reform the broken tax code and offer relief to families and businesses across the country. All Senators and Congressmen should vote for H.R. 1.

Key highlights of H.R. 1:

-Reduces almost every individual income tax bracket.

                -Current law: 10%, 15%, 25%, 28%, 33%, 35%, 39.6%

                -Tax Cuts and Jobs Act: 10%, 12%, 22%, 24%, 32%, 35%, 37%

-Doubles the standard deduction to $12,000 for an individual and $24,000 for a family.

-Doubles the death tax exemption to $11 million ($22 million for couple).

-Increases the child tax credit to $2,000 per child.

-Eliminates the Obamacare individual mandate tax penalty.

-Increases the threshold for the Alternative Minimum Tax.

-Limits the state and local tax deduction to $10,000 and the mortgage interest deduction to $750,000.

-Expands 529 education savings accounts for elementary, secondary and higher education.

-Reduces taxes on pass-through businesses (Sole proprietorships, partnerships, LLCs, S corporations) through a 20 percent deduction on business income subject to certain limitations.

-Reduces the corporate income tax to 21 percent effective immediately.

-Implements 100 percent full business expensing for five years and expands Sec. 179 small business expensing.

-Eliminates the Corporate AMT.

-Limits deductibility of net interest expense to 30 percent of EBITDA (earnings before interest, tax, depreciation, and amortization) until 2022 when it is calculated as 30 percent of EBIT (earnings before interest and tax).

-Implements a territorial system of taxation with a 100 percent dividend exemption system. Imposes a deemed repatriation rate of 15.5 percent for cash/cash equivalents and 8 percent for non-cash/illiquid assets.

Photo Credit: Flickr


20 Conservative Groups Support the Senate’s Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Monday, November 13th, 2017, 7:00 PM PERMALINK

A coalition of 20 conservative groups led by Americans for Tax Reform today wrote to Chairman Orrin Hatch and the members of the Senate Finance Committee supporting the Chairman’s mark of the Tax Cuts and Jobs Act.

[The letter can be found here]

As the letter says, the Tax Cuts and Jobs Act simplifies the code, reduces taxes for families and businesses, and grows the economy. While there is still more work to be done, the Act is an excellent start, and the signers are ready to work with the Committee to pass comprehensive tax reform before the end of the year.

The full letter can be found here and is below:

Dear Chairman Hatch and Members of the Senate Finance Committee:

We write in support of the Chairman’s mark of the Tax Cuts and Jobs Act. The release of this legislation marks an important step in passing comprehensive tax reform before the end of the year. We urge your committee to swiftly approve this bill and send it to the full Senate for consideration.

Just like the House bill, your proposal is pro-growth and pro-family. This legislation simplifies the code, reduces taxes for families and businesses, and grows the economy, leading to higher wages and new or better jobs.

Importantly, more work needs to be done, such as ensuring full repeal of the death tax. As you move through the committee process this week, it is imperative that this unfair tax is repealed.

Congress has a rare opportunity this year to reform the broken federal tax code. We stand ready to work with you as the Senate Finance Committee continues moving through regular order starting with mark-up of the legislation this week.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

Pete Sepp
President, National Taxpayers Union

Christine Harbin
Vice President of External Affairs, Americans for Prosperity

James L. Martin
Founder & Chairman, 60 Plus Association

Lisa B. Nelson
Chief Executive Office, ALEC Action

Phil Kerpen
President, American Commitment

Andrew Quinlan
President, Center for Freedom and Prosperity

Olivia Grady
Senior Fellow, Center for Worker Freedom

Dan Caldwell
Executive Director, Concerned Veterans for America

Matthew Kandrach
President, Consumer Action for A Strong Economy (CASE)

Thomas Schatz
President, Council for Citizens Against Government Waste

Katie McAuliffe
Executive Director, Digital Liberty

Nathan Nascimento
Vice President of Policy, Freedom Partners Chamber of Commerce

Jason Pye
Vice President of Legislative Affairs, FreedomWorks

Carrie Sheffield

Executive Director, Generation Opportunity

Mario H. Lopez
President, Hispanic Leadership Fund

Heather R. Higgins
President & CEO, Independent Women’s Voice

Daniel Garza
President, The LIBRE Initiative

Lorenzo Montanari
Executive Director, Property Rights Alliance

David Williams
President, Taxpayers Protection Alliance

Photo Credit: Pixabay


ATR Feedback on the Chairman’s Mark of the Tax Cuts and Jobs Act


Posted by Alex Hendrie on Monday, November 13th, 2017, 7:00 PM PERMALINK

[Full PDF Document Can be Found Here]

Americans for Tax Reform today provided feedback applauding Senate Finance Committee Chairman Orrin Hatch’s mark of the Tax Cuts and Jobs Act.

The Tax Cuts and Jobs Act is pro-family and pro-growth.

The legislation gives tax cuts for Americans of all income levels and simplifies the code. The largest benefit goes to the middle class, according to the Joint Committee on Taxation.

The Act helps Americans by doubling the standard deduction, expanding the Child Tax Credit, and fully repealing the Alternative Minimum Tax. The Act also simplifies the code by repealing distortionary deductions and credits, like the State and Local tax deduction.

On the business side, the Act makes America more competitive in the world, resulting in more jobs and stronger economic growth: another win for Americans of all income levels, most particularly those currently without a job.

The Act reduces the current 35% marginal corporate tax rate, the highest in the developed world, to 20% and replaces the worldwide taxation system with a territorial system. It further implements 100 percent expensing of new investments for five years, and it maintains the existing deductions for advertising. In addition, section 1031 for like-kind exchanges is also maintained, and there is a reasonable deduction for interest expenses.

Americans for Tax Reform, however, does urge the Committee to fully repeal the Death Tax, grandfather in the elimination of the deduction of deferred employee compensation, and extend the minimum hold period for access to long-term capital gains to three years. These changes would create even more jobs and economic growth.

While more work needs to be done, Americans for Tax Reform applauds the Senate Finance Committee on its work and supports the Tax Cuts and Jobs Act.

[Full PDF Document Can be Found Here]

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25 Conservative Groups Support the “Tax Cuts and Jobs Act”

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Posted by Alex Hendrie on Friday, November 3rd, 2017, 1:44 PM PERMALINK

Today, Americans for Tax Reform, along with 24 other conservative groups, released a letter to the Committee on Ways and Means in support of the “Tax Cuts and Jobs Act.” This pro-growth and pro-family Act will simplify the tax code, reduce taxes for families and businesses, and grow the economy, which will lead to higher wages and new or better jobs for Americans.

The document can be found here, and the full text of the letter is below.

 

25 Conservative Groups Support H.R. 1, The “Tax Cuts and Jobs Act”

The Honorable Kevin Brady
Chairman, Committee on Ways and Means
1102 Longworth Office Building
Washington, D.C. 20515

Dear Chairman Brady:

We write in support of the “Tax Cuts and Jobs Act.” The release of this legislation marks an important step in passing comprehensive tax reform before the end of the year. We urge your committee to swiftly approve this bill and send it to the full House for consideration.

This tax bill is pro-growth and pro-family. While more work remains to be done, this legislation simplifies the code, reduces taxes for families and businesses, and grows the economy. This will lead to higher wages and new or better jobs.

Congress has a rare opportunity this year to reform the broken federal tax code. We stand ready to work with you as the Ways and Means Committee begins marking up the legislation next week.

Sincerely,

Grover Norquist
President
Americans for Tax Reform

Pete Sepp
President
National Taxpayers Union

Jim Martin
Founder & Chairman
60 Plus Association

Phil Kerpen
President
American Commitment

Chrissy Harbin

Vice President of External Affairs
Americans for Prosperity

Andrew F. Quinlan
President
Center for Freedom and Prosperity

Corry Bliss
Executive Director
American Action Network

Lisa B. Nelson
CEO
American Legislative Exchange Council Action

Dan Weber
President
Association of Mature American Citizens

Jeffrey Mazella
President
Center for Individual Freedom

Dan Caldwell
Executive Director
Concerned Veterans for America

Thomas A. Schatz
President
Council for Citizens Against Government Waste

Palmer Schoening
President
Family Business Coalition

Carrie Sheffield
Executive Director
Generation Opportunity

Heather R. Higgins
President and CEO
Independent Women's Voice

Derrick Hollie
President
Reaching America

Jenny Beth Martin
Chairman
Tea Party Patriots Citizens Fund

Matthew Kandrach
President
Consumer Action for a Strong Economy

Katie McAuliffe
Executive Director
Digital Liberty

Nathan Nascimento
Vice President of Policy
Freedom Partners Chamber of Commerce

Michael Needham
CEO
Heritage Action for America

Daniel Garza
President
The LIBRE Initiative

David Williams
President
Taxpayers Protection Alliance

Jason Pye
Vice President of Legislative Affairs
FreedomWorks

Lorenzo Montanari
Executive Director
Property Rights Alliance

Photo Credit: Pastor Chris

More from Americans for Tax Reform


ATR Analysis of the Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Thursday, November 2nd, 2017, 4:46 PM PERMALINK

House Ways and Means Chairman Kevin Brady (R-Texas) today released long awaited tax reform legislation, entitled “The Tax Cuts and Jobs Act.” This legislation contains many provisions that simplify the tax code, give tax cuts to families and businesses, and grow the economy leading to higher wages and new or better jobs. The release of this bill represents an important step toward achieving pro-growth tax reform in 2017. Chairman Brady and his staff should be commended for releasing this detailed legislation.

Under this proposal, as many as 95 percent of taxpayers could file on a postcard since the majority of taxpayers would no longer itemize and many existing provisions (such as those relating to family and education provisions) would be consolidated and simplified. These reforms would also allow the IRS to be reduced in size and scope.

In addition, the bill will reduce the corporate tax rate from 35 percent to 20 percent effective 2018. This competitive rate will place American businesses on a level playing field with foreign competitors and will ensure the economy grows by at least three percent, as President Donald Trump has promised.

Individual Provisions:

- Consolidates the seven tax brackets into four (12%, 25%, 35%, and 39.6%) - Under this reform, the existing 10 percent bracket goes to zero. The 15 percent bracket goes to 12 percent.

-The 12 percent bracket applies to income up to $45,000 ($90,000 for married couples). This does not include the standard deduction of $12,000 or $24,000.

-The 25 percent bracket applies to income between $45,001 and $200,000 ($90,001 and $260,000 for married couples).

-The 35 percent bracket applies to income between $200,001 and 500,000 ($260,001 and $1 million for married couples).

-The 39.6 percent bracket applies to income above $500,000 ($1 million for married couples).

-Doubles the standard deduction (The first $12,000 for individuals and $24,000 for families will not be taxed). 

-Increases the child tax credit from $1,000 to $1,600 per dependent under 17 with an additional $300 credit per parent. The child tax credit is currently used by 22 million Americans.

-Simplifies the tax code – The bill repeals personal exemptions, repeals the state and local tax deduction for income and sales taxes and caps the SALT deduction for property taxes at $10,000. The home mortgage interest is grandfathered in and preserved for new homes up to $500,000. All other itemized deductions with the exception of charitable giving are repealed.

- Repeals the alternative minimum tax – This tax is currently paid by 4.5 million individuals and families.

Repeals the death tax effective 2024 - In years 2018 to 2023, the exemption is doubled to $10 million ($20 million for a couple) and indexed to inflation. The generation skipping transfer tax is also repealed while the gift tax is lowered from 40 percent to 35 percent. Step-up in basis is preserved.

Preserves retirement tax savings accounts such as 401(k)s and Individual Retirement Accounts.  

Business Provisions:

Permanently reduces the corporate income tax rate to 20 percent effective immediately - The current 35 percent federal rate is the highest in the developed world. Reducing this rate to 20 percent will allow American businesses to compete against foreign competitors and will allow the U.S. economy to grow. According to an analysis by the Council of Economic Advisers, a 20 percent corporate rate would increase average household income by between $4,000 and $9,000.

- Enacts 100 percent, full business expensing for five years - Section 179 small business expensing is increased from $500,000 to $5 million, and the phaseout is increased from $2 million to $10 million.

Reduces the business tax rate on pass-through entities from 44.6 percent to 25 percent - This new rate would be applied based on one of two formulas designed to prevent wage income from being mischaracterized as business income.

- Repeals numerous distortionary tax credits but preserves the Research and Experimentation (R&E) credit.

- Implements a partial cap on deductibility of net interest expense for corporations - The cap will be applied when a corporation’s net interest exceeds 30 percent of earnings before interest, tax, depreciation and amortization (EBITDA).

- Implements a modern, territorial system of taxation so that American businesses operating overseas can compete.

- Introduces a one-time repatriation rate of 12 percent for cash and 5 percent for non-cash, payable over eight years.This allows $2.6 trillion in after-tax income to come back to the U.S. to be reinvested in the economy. Ideally, the repatriation rate should be single digit rates. However, this reform will still allow trillions to come back into the U.S. economy. 

Photo Credit: Pixabay


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