In anticipation of President’s Trump’s proclaimed “big tax reform and tax reduction” announcement Wednesday, we’ve taken a look at each of the key players in the Republican tax reform effort, including President Trump, Secretary Ryan, and Steve Mnuchin.

President Donald J. Trump: During his Presidential Campaign, President Trump proposed drastic rate reductions for business taxpayers, earnings repatriations of foreign profits, aggressive property expensing, and import protections all with the goal of promoting domestic businesses and job creation. The proposal was more of an outline as opposed to Candidate Hillary Clinton’s detailed proposals.

Individual proposals:

• Reduce the number of brackets to three, utilizing 12%, 25% and 33%.
• Increase the standard deduction to $15,000 for single individuals and $30,000 for taxpayers married filing jointly.
• Limit itemized deductions to $200,000 for Married Joint filers and $100,000 for Single filers.
• Remove personal and dependent exemptions, yet introduce an above-the-line deduction for children under 13 that would be capped at state average childcare for age of child, limited to 4 children per taxpayer.
• Eliminate AMT, the estate tax, the 3.8 percent NII tax and Head of Household filing status.
• Retain the existing capital gains rate structure (max rate of 20%).

On the business side the proposals include:

• Reducing the top corporate tax rate to 15 percent.
• Cap personal income tax rates on the “active income” of pass-through businesses at 15%.
• Allow businesses to immediately and fully write off capital investments.
• Commit to retaining the Research and Development Credit. Most other corporate tax expenditures, though none are specifically mentioned, would be eliminated.

Speaker of the U.S. House of Representatives Paul D. Ryan Jr: In mid 2016, Speaker Ryan introduced the GOP’s “A Better Way” Tax Proposal, also has been referred to as “The Blueprint.” The proposal mirrored many of Trump’s proposals, however with less drastic rate cuts. The proposal included the follow points (not all inclusive):

Individual proposals:

• Reduce the number of brackets to three, utilizing 12%, 25% and 33%.
• Remove most itemized deductions except the mortgage interest, charitable giving and education expenses, and replace with a larger standard deduction of $12,000 for single individuals; $18,000 for single individuals with a child; and $24,000 for taxpayers married filing jointly.
• Remove personal and dependent exemptions, yet increase the child tax credit to $1,500 and add a new $500 tax credit for non-child dependents.
• Eliminate AMT, the estate tax, and the 3.8 percent NII tax.
• Reduce tax rates on investment income be allowing a 50% deduction for net capital gains, dividends and interest income. (In essence investment income would be taxed at 6%, 12.5% percent and 16.5% – one half of the above referenced proposed rates.)
• A pledge to allow most individuals to file their taxes on a form the size of a postcard.

On the business side the proposals include:

• Reduce the top corporate tax rate to 20 percent.
• Cap personal income tax rates on the “active income” of pass-through businesses at 25%.
• Allow businesses to immediately and fully write off capital investments.
• Eliminate some deductions of business interest expense.

US Secretary of the Treasury Steven T. Mnuchin: Mnuchin has been attached to a so-called “Mnuchin Rule.” During his confirmation hearings, Mnuchin was asked whether the administration’s tax reductions would mostly favor wealthy taxpayers, to which he inferred the absolute tax cuts for high income individuals would be offset by increases in other areas such as reduced deductions.

More recently Secretary Mnuchin did not fully commit to his newly ascribed canon, rather he is quoted as saying, “Our primary focus is a tax cut on middle income and not the top 1%. We’re working toward that as a goal. Don’t hold me to that to the penny. But that’s the direction we’re going in.”

Chairman of the Committee on Ways and Means, Kevin Patrick Brady: Brady has indicated in late April 2017 that the House Republican Blueprint includes vast simplicity, “What we are proposing is never-before-seen simplicity—that nine of ten Americans will be able to file their taxes on a postcard-like system.”

Surgent will monitor issues as they develop. Subscribe to our blog, and follow along with our Trump Tracker for CPAs, to be sure you’ll hear about developments as they happen.