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Congress Set to Embark on Ambitious Tax Reform Package in First 100 Days of Trump Administration

Sonu Shukla
Congress Set to Embark on Ambitious Tax Reform Package in First 100 Days of Trump Administration

No matter what your political beliefs, there is no question that the election of 2016 is going to bring tremendous change to the United States, and many of the changes will impact our tax system. Not only did President Trump indicate that he has his own ideas about tax reforms, he has also indicated that he will work with Congress to enact change.

Congress also has several different committees that have responsibility for the creation of tax laws. These include the Senate Finance Committee and the House Ways and Means Committee. Leadership of both of these committees and many others have been working for years to enact reforms and many of their efforts have been blocked, but it is likely that with them working in tandem with the newly-elected president, the next year will see the greatest changes since those that followed the Tax Reform Act of 1986.

The stated goal of both President Trump and both the House and the Senate is to pass a significant tax reform bill quickly. Though the leadership of the House Ways and Means Committee has set a goal of making progress within the first 100 days of the new presidency, the Senate Finance Committee tends to move at a more measured pace, and is predicting that the development and approval of tax reform legislation is likely to take a bit longer.

Among the items that have been discussed, and which are likely to be included in the tax reforms, are:

  • Repealing and replace of the estate tax, with a capital gains tax suggested as the replacement.
  • Providing the ability to immediately expense depreciable business assets while eliminating depreciation.
  • Reducing various business tax credits and preferences and establishing a top corporate tax rate of between 15 percent (Trump’s suggestion) and 20 percent.
  • Eliminating taxation of American companies on their foreign profits while moving to a territorial international tax system for previously accumulated earnings that includes a deemed repatriation provision.
  • Consolidate the current seven individual income tax rates into three: 12, 25 and 33 percent. This would significantly reduce the current top rate of 39.6 percent.
  • Increase the standard deductions to $30,000 for married taxpayers filing jointly and $15,000 for others.
  • Cap itemized at $200,000 for married taxpayers filing jointly and $100,000 for others.
  • Although unclear, at this time, there was talk of eliminating personal exemptions. 

The discussions of these changes to the tax law should be of great interest to every American taxpayer, as they are likely to have a dramatic impact on each and every one of us, no matter what our income level or assets.

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Sonu Shukla

Sonu Shukla

Sonu Shukla is a CPA, accountant, and tax preparer based in Orlando, FL. Sonu Shukla can assist you with your tax preparation and planning needs. Sonu is more than just another accountant in Orlando, Florida; he is a small business owner himself. It is a position in life that grants him the perspective and insight to emphasize with his clients, bringing them the best service possible. A Certified Public Accountant and a Certified Financial Planner, Sonu possesses the skills, education and experience to demonstrate unerring business acumen and passionately planned financial strategies. Being proactive is key for Sonu, tailoring highly efficient tax plans for his small business clients, all in a one on one environment where he and the client can bounce ideas around until every detail is worked out.

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