Experts at Bloomberg BNA highlight the most important changes the Republican leaders’ nine-page proposal could lead to.
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As part of their
Lower corporate tax rate
Tax rate for pass-throughs
Shift to territorial system
Allowance of full expensing
Estate tax repeal
Reduction in individual tax rates and brackets
Fewer itemized deductions
Wait – there’s more!
What would stay the same
Border-adjustment tax. The framework does not include a BAT or any other provision specifically addressing the taxation of imports and exports.
Corporate integration. There is no mention of corporate integration, an idea that had been supported by Senate Finance Committee Chairman Orrin Hatch, although the framework notes that the committees “may consider methods to reduce the double taxation of corporate earnings.”
Carried interest. There is no proposal regarding the treatment of carried interest, which Treasury Secretary Mnuchin had previously said would be included in tax reform.
Net investment income tax. It appears that the 3.8 percent net investment income tax may remain in the code. The tax was enacted as part of the Affordable Care Act and would have been eliminated by the ACA-repeal bill passed by the House earlier this year. However, that bill stalled in the Senate and did not become law.