Tax Policy Trends: Republicans Reveal Proposed Tax Overhaul

• Main Authors: Philip Bazel, Jack M. Mintz
• Format: Article
• Language: English
• Published: University of Calgary 2017-10-01
• Series: The School of Public Policy Publications
• Online Access: https://www.policyschool.ca/wp-content/uploads/2017/10/Tax-Policy-Trends-Bazel-and-Mintz-Final.pdf

REPUBLICANS REVEAL PROPOSED TAX OVERHAUL The White House and Congressional Republicans have revealed their much-anticipated proposal for reform of the U.S. personal and corporate tax systems. The proposal titled, “UNIFIED FRAMEWORK FOR FIXING OUR BROKEN TAX CODE” outlines a number of central policy changes, which will significantly alter the U.S. corporate tax system. The proposal includes a top federal marginal rate reduction for the sole proprietorships, partnerships and S corporation—small business equivalents— from 39.6% to 25% (state income tax rates would no longer be deductible). Large corporations would also see a meaningful federal rate reduction given the proposed drop in the federal corporate income tax rate from 35% to 20%. Additionally, the proposal includes a generous temporary measure intended to stimulate investment, full capital expensing for machinery with a partial limitation of interest deductions.