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Trump and the Big 6 Kick Off Tax Reform Legislation

Media Alert
WASHINGTON, D.C., September 27, 2017 - After more than a year since the release of the House Tax Reform Blueprint, President Trump and the Big 6 tax negotiators released a framework today for drafting tax legislation in Congress. 

“The framework's goals are to simplify the tax code, raise paychecks, create jobs, and repatriate funds locked offshore by deferral,” said Washington D.C. Tax partner, Jeff Munk

High level details on the tax code are as follows; Baker Botts partners, Richard Husseini, Jeff Munk, Mike Bresson, Don Lonczak and Bobby Phillpott are able to speak on all angles of the Tax Reform framework issued today. 

Individuals: The changes to the tax code for individuals include repeal of the alternative minimum tax, the estate tax, and the generation skipping tax. It also provides a 25% rate for business income of small and family-owned sole proprietorships, partnerships and S corporations. One theme in the framework is that the complex details are left to Congress – for the 25% rate. 

Corporations: The corporate rate is set at 20%, and the corporate alternative minimum tax is repealed too. Starting today, September 27, 2017, business investments in depreciable assets other than structures can be expensed immediately, for at least five years. Interest expense, however, will be partially limited. No further information is given, although a limitation of 30% of EBITDA was thought to be under consideration. 

International:
The framework provides for a 100% exemption for dividends paid from foreign subsidiaries in which a US parent owns at least a 10% stake. However, accumulated foreign earnings are subject to current taxation at an unspecified rate, paid over a period of years, and with a lower rate for illiquid assets. The tax committees are charged with drafting anti-base erosion rules and rules "leveling the playing field" between US companies and foreign headquartered companies. 

To schedule an interview, please contact Sheena Cochran

Click to read the full Tax Reform Thought Leadership piece


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