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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

The tax changes described on&nbsp;President&nbsp;Donald Trump’s website are a crucial part of his overall plan to boost growth in the U.S. economy to an average rate of 3.5% per year and to create 25 million new jobs. The website states that the goals of Trump’s Tax Plan include the following:

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Trump’s proposals would reduce the seven current tax brackets for individuals to three brackets. The tax brackets for married-joint filers are:

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Taxable income less&nbsp;than $75,000: 12%<br>Taxable income more&nbsp;than $75,000 but less&nbsp;than $225,000: &nbsp;25%<br>Taxable income more&nbsp;than $225,000: &nbsp;33%

Tax brackets for single filers would be one-half of these amounts.

The Tax Plan states that “Low-income Americans will have an effective income tax rate of 0%.”

Trump’s proposals would retain the existing capital gains tax rate structure, with a maximum tax rate of 20%.

The Trump Tax Plan includes significant new childcare and elder care proposals, including an above-the-line deduction for children under age 13 and for elder care of a dependent. These deductions would not be available to taxpayers with total income over $500,000 for married-joint filers and $250,000 for single filers. &nbsp;The Plan would also allow the establishment of Dependent Care Savings Accounts.

Other proposals described in Trump’s Tax Plan affecting individuals include the following:

The Trump Tax Plan would lower the corporate income tax rate from 35% to 15% and eliminate the corporate Alternative Minimum Tax. The Tax Plan states, “This rate is available to all businesses, both small and large, that want to retain the profits within the business.”

On June 24, 2016, the House Republicans released the publication, “A Better Way — Our Vision for a Confident America,” which was intended to serve as the basis of tax reform legislation that will be “ready for legislative action in 2017.” The tax proposals described in this publication would limit the tax rate for business income earned through a sole proprietorship or a pass-through entity (such as a partnership or an&nbsp;S corporation) to 25%. In other words, this pass-through business income would be taxable at a maximum tax rate of 25%, even if an individual receiving the pass-through income is otherwise taxable in a higher bracket.

Previous Trump proposals contain a similar special tax rate for income from businesses that operate as pass-through entities. However, the current Trump Tax Plan on his website does not include a special rate for this pass-through income.

Other proposals described in Trump’s Tax Plan affecting businesses include the following:

The tax proposals described in President&nbsp;Trump’s Tax Plan include significantly lower income tax rates for individuals and businesses and other major changes. &nbsp;These proposals, and the proposals described in the House Republican’s “Blueprint,” are expected to receive significant scrutiny in early 2017. Stay tuned. &nbsp;

Automotive

Of Counsel

Jay A. Kennedy

So, What’s Included in Donald Trump’s Tax Proposals?

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So, What’s Included in Donald Trump’s Tax Proposals?

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