A Look at Tax Reform Proposals through the AGC Lens

This week, President Trump released his long-awaited proposal to cut taxes. Both Trump’s proposal and the previously-released House blueprint for tax reform have commonalities with AGC’s goals for tax reform.  There is still a long way to go before tax reform is reality, but AGC believes Republicans in Congress and the President are at a good starting point.
AGC goals include: lower rates, simplification, permanency, fund and finance infrastructure, eliminate AMT, eliminate Death Tax, and reform C-corps and pass-through companies simultaneously.
The chart below shows where the president’s plan and the House proposal align with AGC’s goals (and where they do not).

AGC Tax Reform Goals Trump Plan Elements House Tax Plan Outline  
Lower Rates Individuals 10-25-35% 12-25-33%  
Lower Rates Corporations 15% 20% C Corps, 25% S Corps  
Simplification Fewer brackets, fewer deductions, repeal of AMT Fewer brackets, fewer deductions, repeal of AMT
Permanency No Likely not
Fund and Finance Infrastructure No direct mention No mention and GOP leadership currently opposed
Eliminate AMT Eliminated Eliminated
Eliminate Death Tax Eliminated Eliminated  
Reform for C Corps and S Corps simultaneously Yes Yes

Rate reduction is baked in and simplification is a focus of all proposals on the table today. However, there is still much work to be done on ensuring Congress connects tax reform with infrastructure investment. Fixing the Highway Trust Fund and providing funding for infrastructure in conjunction with tax reform is the main focus of the Transportation Construction Coalition Fly-In, May 16-17, 2017.
Additionally, there is still a lot of fine tuning that must be worked out including, determining whether repeal of the Death Tax will include a step-up in basis or how the president’s plan will differentiate between business income and wages. The president’s plan also did not specify his position on tax exempt municipal debt. Stay tuned.
For more information, contact Jeff Shoaf at [email protected] or (202) 547-3350.

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