Many questions surround the current state of corporate tax reform. The two main questions in this state of flux are what the tax base is and when gains would be taxed. However, every indication suggests that a lower tax rate would replace the current 35% tax on corporate profits. Trump’s campaign promises suggest a 15% tax rate, while the GOP plan would lower the rate to 20%. Along with the lowered corporate income tax rate President Trump has indicated that he would eliminate the corporate alternative minimum tax.
To make up the deficit in revenue from the proposed rate change, it has been indicated that the corporate tax expenditures and tax incentives would be eliminated with the exception of the research and development credit. Although some lawmakers have suggested that they may want to preserve certain energy and/or employment credits.
We will continue to keep you informed of any major corporate tax reform details as congress and President Trump exchange ideas.