For businesses –
- A measure to cut the corporate tax rate to 20%
- Imposition of a tax of as much as 12% on multinational companies’ accumulated offshore earnings
- A reduction of the top marginal tax rate on pass-through companies to 25%, but with limits on the kind of income that would qualify
For individuals –
- A $500,000 cap on the mortgage-interest deduction on new home sales (the current cap sits at $1 million)
- A phasing out of the estate tax (over a number of years)
- A measure to cut individual tax rates for many Americans (however the top marginal rate remains at 39.6%)
- An increase in the child tax credit from $1,000, currently, to $1,600
- Preservation of a tax break for individuals in high-tax states which allows them to deduct the cost of their state and local property taxes (capped at $10,000)
No changes to 401(k) plans were included and the bill does not contain a repeal of the Obamacare individual mandate, despite expectations that these might be included in the proposed tax legislation.
President Trump has called on Congress to pass the legislation by Christmas; with a number of challenges on the horizon, this may or may not be possible. On Monday, the bill will be taken up by the House Ways and Means Committee.
For more details, read the article in full at Accounting Today.