Business Tax Proposals Set Stage for Upcoming Negotiations
The White House recently announced its tax reform plan — a broad outline of policies, with details expected to be worked out as discussions with Congress progress. The administration's tax reform proposals include a reduction in the top corporate tax rate from 35% to 15%. The announcement seemed to indicate that the 15% rate would also apply to business income that is reported on individual income tax returns; for example, income that passes through to individuals from entities like partnerships, S corporations, and limited liability companies.
In order to help pay for business tax cuts, both Congress and the administration have proposed changes to how U.S. corporate taxes reach beyond the national border. This is likely to be a focus of future negotiations.