RIA: On Wednesday afternoon, U.S. National Economic Director Gary Cohn and Treasury Secretary Steven Mnuchin, on behalf of the Trump Administration, revealed "core principles" of the President's tax reform plan. Many of the proposals were similar to those he made on the campaign trail, including a cut in the tax rate for businesses to 15%.
Director Cohn and Secretary Mnuchin emphasized throughout the briefing that many details would still be negotiated. They provided a greater level of detail today, although these details are obviously nowhere near firm.
For business taxpayers:
RIA observation: Previous reports, as well as Trump's proposal on the campaign trail, had indicated a 10% tax was being considered.
RIA observation: Noticeably absent from the plan was a border adjustment tax, which several House Republicans favor as a way to offset revenue losses resulting from tax cuts.
For individual taxpayers:
What about revenue neutrality? The plan did not include any proposals for raising new revenue to offset that lost by the tax cuts, which, if enacted, could significantly increase the federal deficit. Secretary Mnuchin has said the cuts will pay for themselves by generating more economic growth but fiscal hawks, potentially some in Trump's own Republican Party, along with Democrats, are certain to question these claims.
Timeframe. Secretary Mnuchin, consistent with recent statements, said that they were determined to "get this done this year".
Contact Scott Taylor, CPA if you have questions on this proposed tax plan, but remember it is still in the very early stages and will most likely have several changes before it is approved and therefore actionable for your business.
Retirement plan administrators and 401(k) plan sponsors should be aware of the following May 2017 administrative deadlines for defined contribution plans:
Source: 2017 Key Administrative Dates and Deadlines