The President is clearly emphasizing business-tax reductions. The 15% rate – the same as he plans to propose for corporate income — applies to pass-through entities, such as S-corps and LLCs, but the proposed new top rate for individuals would fall to, perhaps, 37% from the current top rate of 39.6%, The Wall Street Journal is reporting.
The proposal, to be unveiled today, apparently doesn’t include the House Republicans’ border-adjustment tax concept. That will be welcome news to bev/al importers as well as retailers in general who have come to depend upon products made in low-wage offshore facilities.
The Journal also reports the President will propose a territorial tax system, under which U.S. corporations would pay little or no tax on future foreign earnings. The current tax code taxes all income worldwide. Companies get credits for foreign taxes and don’t have to pay U.S. taxes under foreign profits are brought back to the U.S.
The Journal has an analysis of how Trump’s plan will affect your taxes.