One of the more anticipated pieces of legislation out of Washington DC has been the Trump tax proposal — or really ANY tax proposal — that has been said to carry some kind of relief for all taxpayers.
Healthcare is another hot button but taxes slightly edge out healthcare as the #1 item of interest (and if my readership is any indication, the subject of taxes is my #1 most read topic year-over-year).
This is at least a two-part edition, so here goes the tip of the iceberg of ideas being floated by reporters on the front lines in Washington:*
- Lowering the corporate tax rate to 15%
- theoretically encourages US corporations to bring back, or “repatriate”, cash being held overseas.
- Simplification of individual tax brackets to three: 10%, 25% and top rate of 35%.
- Estate tax repeal
- but with the possibility of a “Canadian-style” capital gains tax at death as a replacement.
- Changing the tax deductibility of employee 401k contributions
- possibly limiting the amount of the current $18,000 that can be contributed pre-tax (has similarities to the current Roth 401k rules)
- Changing the maximum tax deductibility of IRA contributions
- Doing away with the federal deduction for State and Local taxes
- VERY interesting and counter-intuitive debate! Would affect high tax states like NJ, NY, California most…with Democrats against and Republicans favoring.
- Doing away with the AMT (Alternative Minimum Tax)
- has been said to create minimal savings overall for taxpayers
- Higher standard deduction
- Leaving untouched the mortgage interest deduction and deductions for charitable contributions.
There are additional ideas on the table. These are all SUPER-preliminary and when finalized (if ever) by Congress must be evaluated by your CPA or tax professional in relation to your personal tax filing. In the meantime, I will be asking my tax adviser the same…followed by well-considered investment decisions.