William Sherman is a Partner in Holland & Knight's Ft Lauderdale office .

David Scott Sloan is a Partner in Holland & Knight's Boston office.

Kathleen M. Nilles is a Partner in Holland & Knight's Washington, D.C. office.

Daniel L. Janovitz is an Associate in Holland & Knight's Ft Lauderdale office.

HIGHLIGHTS:

  • With Republicans in control of the U.S. Senate, the U.S. House of Representatives and the White House starting in 2017, the federal government is now better positioned to move forward on comprehensive tax reform.
  • It is expected that upcoming tax reform efforts will build on the principles set forth in the House Republicans' "A Better Way" proposal, as well as the tax proposals advanced by President-Elect Donald Trump during the course of his campaign.

With Republicans in control of the U.S. Senate, the U.S. House of Representatives and the White House starting in 2017, the federal government is now better positioned to move forward on comprehensive tax reform, with anticipated legislation that restructures both the individual and business income tax provisions of the Internal Revenue Code. It is expected that upcoming tax reform efforts will build on the principles set forth in the House Republicans' "A Better Way" proposal, released by House Speaker Paul Ryan (R-Wis.) in June 2016, as well as the tax proposals advanced by President-Elect Donald Trump during the course of his campaign. Trump's original tax plan was proposed in September 2015, and his revised tax plan was proposed in September 2016.

Below is a comparison of the House GOP plan and the Trump plan. While there are many differences in the extent of tax relief promoted by each plan (with Trump's being by far the more generous), there are many similarities on key issues, including significant cuts in both individual and business tax rates, repeal of the estate tax and efforts to position U.S. businesses to compete on a more level playing field internationally. Of course, there are many details still to be completed, and many House Republicans have made it clear that they have no intention of passing huge tax cuts that would worsen the growing federal deficit. For the most part, however, details about any offsetting tax revenue raisers that may be imbedded in tax reform have yet to be worked out or disclosed.

It is important to note that any House-passed tax reform may need to be negotiated with the Senate, led by Minority Leader Charles Schumer (D-N.Y.) and Senate Committee on Finance Chairman Orrin Hatch (R-Utah). The Democrats' priorities differ significantly in focus from the Republican proposals, and it is likely that the Democrats' strong minority will, under Senate rules, make them key players in developing any tax reform legislation that can pass the Senate. Additionally, Hatch and his staff have been working for months on a comprehensive "corporate integration" tax plan aimed at eliminating the double taxation of income earned by corporations, but the plan has not yet been released. Such a plan may be substantially different than the House GOP or Trump plans.

To view the article in full click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.