White House Unveils Tax Reform Plan

The Trump administration released an outline of its tax reform proposal last week, laying out core principles and goals for its negotiations with Congress. As proposed, the Trump tax plan would reduce the corporate tax rate to 15 percent (from the current 35 percent rate), tax the business income of partnerships and other pass-through entities at 15 percent, and create three individual income tax brackets with rates of 10, 15 and 35 percent. The administration’s plan would also eliminate the alternative minimum tax and the estate tax.

The White House proposes to eliminate certain preferences in the tax code, although little detail was provided. Notably, the deduction for state and local taxes, which is important to residents of states such as New York and California, would be eliminated. During the presidential campaign, candidate Trump also vowed to end the capital gains treatment of “carried interest,” which he identified as a “Wall Street loophole” benefiting the hedge fund industry. Chief of Staff Reince Priebus reiterated this goal during an appearance on ABC’s This Week on Sunday.

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