House Republican Tax Reform Bill released
"Tax Cuts and Jobs Act" summary and draft legislation released
TAX ALERT |
On Nov. 2, 2017, the House Ways and Means Committee released a much anticipated tax reform plan. The two-page summary of the “Tax Cuts & Jobs Act” gives a few more details on issues that have been debated for months, and will likely continue to be controversial. Here are the highlights.
- Plan changes individual rates, reduces number of brackets, changes bracket levels, increases standard deduction but eliminates exemptions. Results of combined changes are very fact-sensitive.
- Plan repeals state and local tax deductions, other than $10,000 of property taxes.
- Plan limits deductible home mortgages up to $500,000; existing mortgages grandfathered.
- Plan limits business interest deductions for pass-throughs with some exceptions.
- Plan repeals AMT, medical expense and casualty expense deductions.
- Plan retains 39.6% top rate, but at higher income levels.
- Plan reduces corporate rates to 20 percent permanently and immediately.
- Plan reduces pass-through rates to 25 percent, but with substantial limitations; many details unknown.
- Plan creates a territorial tax system and adds anti-base-erosion provisions, including a 12 percent tax on multinational companies’ accumulated offshore earnings.
Following the unveiling of the plan, the House Ways and Means Committee released the actual text of the draft legislation. We will provide additional coverage and analysis as we parse its provisions.
The House Ways and Means Committee Tax Cuts and Jobs Act can be accessed here.