Taxes Current Developments

To contact us:

Owen Fallon, CPA

Sue Fallon, Office Manager

Phone: 505-883-1099

Fax: 505-883-6737

Email: ogfcpa@qwestoffice.net

To contact us:

Owen Fallon, CPA

Sue Fallon, Office Manager

Phone: 505-883-1099

Fax: 505-883-6737

Email: ogfcpa@qwestoffice.net

 

Trump's broad Tax Reform Outline Proposal

In September 2017 the Trump administration/Republican House reintroduced a "Unified Framework for Fixing Our Broken Tax Code".  The proposals include the following items that were part of President Trump's campaign:

 

1) Lower and consolidated (eg., fewer) individual income tax rate schedules.

2) Double the standard deduction and eliminate most itemized deductions except mortgage interest and charity.

3) Repeal personal exemptions and HOH subsidy to replace with; Dependent care savings accounts, spending rebates for childcare, tax credit for caregivers to parents.

4) Repeal the alternative minimum tax and the estate tax on high income taxpayers; the prior repeal of Obamacare-related taxes is no longer in the proposals.

5) Simplify individual income taxes so that “postcard” tax filing would be possible for many individuals.

6) Lower corporate income tax rates by more than half and tax the net income of pass-through, Sub S corps and sole proprietorships at rates lower than that of many owners' personal income tax rates.

The framework includes numerous provisions that are appropriate in terms of tax and economic theory but are radical in the degree of change needed to get from the present tax code to any semblance of the new proposals.  The inability to move from where the tax code is now (point A) to a totally new system (B) has prevented the adoption of large-scale income tax changes since the 1986 Tax Act.

There will be much more to come in this area, as the parties attempt to achieve agreement in this contentious area.  It would be virtually impossible to enact these changes for the present tax year 2017.