While the tax reform proposal was released this morning, there are only a few details to share, which is consistent with prior ‘proposals’ that were publically floated earlier this year. Key points in the newest  tax reform proposal include the following:

  • Repeal of the federal estate tax in 2024.
  • Repeal of the Alternative Minimum Tax (AMT).
  • Doubling the standard deduction from current amounts.
  • Increase in the child care credit to $1,600 per year.
  • Retain the highest income tax rate, 39.6%, for very high earners.
  • Reduction in corporate income tax rates to a maximum 20% [many corporations pay this rate now after they take advantage of multiple deductions that may, or may not, disappear.]
  • Elimination of the State and Local Tax (SALT) income tax deduction. This is already attracting threats to vote ‘no’ from numerous legislators on both the east and west coasts.
  • Retention of the income tax deduction for state and local property taxes [surprising some.]
  • Capping the home mortgage interest deduction at a mortgage loan balance of $500,000.
  • No mention of repealing the individual mandate which is part of the Affordable Care, aka ‘Obamacare’, Act. President Trump infers that he may veto the tax legislation if this repeal is not part of the tax reform bill.

As more details are released I will get back to you with, hopefully, more information.