White House Releases Broad Principles For Tax Reform
Last Wednesday, U.S. Treasury Secretary Steve Mnuchin and National Economic Council Director Gary Cohn briefed reporters on President Donald Trump’s broad principles for federal tax reform. The plan, which was about a page long, would:
- Cut the corporate income tax rate from 35 percent to 15 percent;
- Cut the top income tax rate for pass-through companies from 39.6 percent to 15 percent;
- Pass a repatriation tax to bring offshore profits back to the United States;
- Reduce the number of individual income tax brackets from seven to three (a 10 percent bracket, a 25 percent bracket, and a 35 percent bracket);
- Double the standard deduction so that a married couple won't pay any taxes on the first $24,000 of income they earn;
- Repeal the alternative minimum tax;
- Repeal the federal estate tax;
- Repeal the Affordable Care Act tax on capital gains and dividends;
- Eliminate most of the tax breaks that benefit high-income individuals;
The Metals Service Center Institute (MSCI) is a strong supporter of comprehensive federal tax reform. Our corporate tax rate is unfair, overcomplicated, and uncompetitive globally, and welcomes President Trump’s proposed corporate rate cut, and his proposed rate cut for pass-through entities. The organization will take a position on a bill once one has been formally proposed in Congress.
Additionally, MSCI is a member for the Coalition for Fair Effective Tax Rates (CFETR), which argues that federal tax reform must include cuts to both the corporate and pass-through income tax rates. In statement regarding the White House’s principles for tax reform, the coalition also argued that the Trump administration must consider effective tax rates, or the amount that businesses actually pay in taxes. The statement said, “As discussions move ahead and the policy evolves, we encourage the President and lawmakers to view reform through the lens of effective tax rates” because “it is unfair for some industries to pay high effective rates of taxes while others pay little.” Click here to read the full statement and to visit CFETR’s website.