Tax Update (October 26)
|Trump’s 10% Tax Cut:
President Donald Trump has promised a 10 percent tax cut for the middle class, but the administration has been short on details thus far. House Ways and Means Committee Chairman Kevin Brady (R-TX) is willing to work with the president to accomplish this goal. In a statement[i], Brady said he has “been working with the White House and the Treasury on some ideas of how best to do it.” He reiterated that the tax cut will be a priority in 2019 if Republicans retain control of the House. Senate Finance Committee Chairman Orrin Hatch (R-UT) said it’s “highly unlikely” such a tax is passed during the lame duck session, but quipped “I’ve seen miracles happen before.”
Tax Cuts and Jobs Act (TCJA) Webpage:
European Union Digital Taxes:
Treasury Secretary Steve Mnuchin issued a statement cautioning against unilateral action on digital tax based on gross revenue. “A tax should be based on income, not sales, and should not single out a specific industry for taxation under a different standard,” Mnuchin said in the statement. He stated that the US is working closely with the OECD to address issues of base erosion and fair taxation. To read the full statement, click here[ii].
Proposed 163(j) Regulations:
The Office of Information and Regulatory Affairs (OIRA) has begun its review of proposed regulations under section 163(j). The regulations were proposed in April and focus on the limitation on business interest expense deduction. They apply to several issues involving the deduction, including how to apply the Section 163(j) limitation at the consolidated tax return filing level.[iii]