By: Randall A. Denha, Esq.*
After what seemed to be the longest election cycle in recent memory (in no small part due to constant media coverage), which saw jabs, upper cuts and occasional knock-outs on the campaign trail, the American public has elected Donald Trump as president of the United States. While he, along with a Republican controlled House and Senate, could affect tax policy, it remains to be seen whether President-elect Trump will preside over significant tax reform. Nonetheless, several areas of tax could be affected, especially in the areas of corporate, individual and estate and gift taxation, among a few to name.
Below are key aspects of President-elect Trump’s proposed tax policy and how they will affect your bottom line if Congress should approve them.
Corporate Tax
- Reduce the top corporate tax rate from 35% to 15%.
- Reduce or eliminate unspecified loopholes that benefit special interests as well as deductions made unnecessary or redundant by the new lower corporate tax rate.
- Allow manufacturing firms immediate expensing of all new business investments in lieu of a deduction for interest expense.
- Eliminate the corporate alternative minimum tax.
- For investment managers, tax income from carried interests at ordinary income rates.
Individual Tax
- Create three tax brackets with rates of 12%, 25% and 33%.
- Eliminate the tax on net investment income.
- Cap the capital gains tax rates at 20% with a lower rate for individuals not in top brackets.
- Close unspecified “special interest tax breaks” and cap deductions at $100,000 for single filers and $200,000 for married filers.
- Eliminate the individual alternative minimum tax.
- Implement new dependent-care savings accounts to be used for child care, after-school enrichment programs and school tuition, as well as in-home nursing and nursing home care for elderly dependents.
- Increase the standard deduction to $30,000 for joint filers and $15,000 for single filers with personal exemptions eliminated.
Estate and Gift Tax
- Permanently eliminate the federal estate tax.
- Subject capital assets exceeding $10 million held at death to income tax, and disallow contributions of appreciated assets into private charities established by the decedent or their relatives.
*RANDALL A. DENHA, J.D,, LL.M., principal and founder of the law firm of Denha & Associates, PLLC with offices in Birmingham, MI and West Bloomfield, MI. Mr. Denha continues to be recognized as a “Super Lawyer” by Michigan Super Lawyers in the areas of Trusts and Estates Law; a “Top Lawyer” by D Business Magazine in the areas of Estate Planning and Tax Law; a Five Star Wealth Planning Professional; Michigan Top Lawyer; New York Times Top Attorney in Michigan and a Lawyer of Distinction in the areas of Estate and Tax Planning. Mr. Denha can be reached at 248-265-4100 or by email at rad@denhalaw.com
