Tax change is in the air for 2017
For 2017, tax change is in the air. What the final tax bill may include is at best an educated guess at this point. But here are some of the ideas that are being put forth.
INDIVIDUAL TAX REFORM
Reduce the number of tax rates from seven to three, 12 percent, 25 percent and 33 percent. The 33% will kick in on income over $225,000 for married taxpayers ($112,500 for single filers)
Increases the standard deduction to a flat $30,000 for married taxpayers and $15,000 for single taxpayers and repeal of state and local tax, medical and miscellaneous deductions as well as some sort of cap on total itemized deductions.
Eliminate personal exemptions in part as a trade-off for making the standard deduction so high
Repeal of the Alternative Minimum Tax.
Eliminate the 3.8 percent tax on net investment income.
An above-the-line deduction for child care costs
Rebates for low-income taxpayers
Dependent Care Savings Account for $2,000/year (low-income eligible for $500 federal match)
Six weeks of guaranteed maternity leave through the unemployed insurance system
A $5,000 elder care deduction
BUSINESS TAX REFORM
Reduces the corporate income tax rate from 35 percent to 15 percent
Eliminate corporate alternative minimum tax
For US manufacturing, full expensing of capital investments instead of deducting interest paid
Changing the tax laws creates a lot of moving part and it never quite works out the way intended. For now, we will wait and watch what changes comes into play and then act accordingly.
