Overview
Trump Administration Unveils Principles of Tax Reform Plan: Secretary of Treasury Steven Mnuchin and National Economic Director Gary Cohn held a press conference today to provide an overview of the high-level principles that will form the basis of the Trump Administration’s tax reform proposal. Secretary Mnuchin and Director Cohn stressed that the details of the proposals were still being worked out in consultation with Congress. The high-level proposals that were described included the following:
Business Tax Reform
- Lower the top marginal rate for corporations and certain business-income earned by passthrough entities to 15%
- Shift from a worldwide income tax system to a territorial system
- Impose a one-time tax on unrepatriated earnings
Individual Tax Reform
- Shift to three tax brackets for individuals, with marginal rates of 10%, 25%, and 35
- Double the size of the standard deduction
- Repeal the alternative minimum tax
- Eliminate the 3.8% tax on net investment income
- Repeal the estate tax
- Eliminate all itemized deductions, other than the mortgage interest deduction and the charitable contribution deduction
- Provide increased tax relief for child and dependent care expenses
IRS Appeals Medtronic Transfer Pricing Case: The IRS has appealed the US Tax Court’s decision in Medtronic, Inc. v. Commissioner. In June 2016, the Tax Court rejected the IRS’s attempt to seek transfer pricing adjustments that would have increased Medtronic’s tax liability by over $1 billion.
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