House Oversight — Estate records
HOUSE_OVERSIGHT_014518
Microsoft Word - 2016 Post Election Tax Changes Rev Chart 12 14
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TAX ALERT 2016‐5 DECEMBER 2016 The 2016 Election: Tax Changes Expected INTRODUCTION The election of Donald Trump as President is expected to lead to significant tax law changes. The tax changes may come in two parts: (1) from the repeal of the Affordable Care Act (ObamaCare) and its related taxes and (2) from comprehensive tax reform. Since Republicans will also have majorities 1 in both the House and Senate, it is anticipated that such changes could be undertaken without the need for bipartisan support. It is likely that the Affordable Care Act, and its taxes, could be repealed in early 2017 and result in an immediate tax cut for dividends, capital gains and high‐income earners. It is more time consuming to enact comprehensive tax reform and such efforts may not result in a tax bill until midsummer or the fall, which could push the effective date of broad‐based tax changes into 2018. Although it is not yet known exactly what the changes will be or when they would be effective, we are issuing this Tax Alert to inform you of changes that are anticipated, based on proposals made during the campaign by both President‐elect Trump and the House Republicans. We also discuss how these changes may impact your planning, both currently and in the future. When we have more specifics, we expect to issue another Tax Alert. INCOME TAX Current law. Ordinary income can be subject to rates as high as 39.6%, and capital gain can be subject to rates as high as 20%. In both cases, an additional 3.8% surtax might apply. Certain itemized deductions are “phased out” under the so‐called “Pease limitation” when Individual Tax Rates Top Capital Gains/Dividend Tax Rate Itemized Deductions AMT Investment Surtax Estate Tax Current Law* 10, 15, 25, 28, 33, 35, 39.6% 20% (plus 3.8% surtax) 3% of itemized deductions are lost when adj. gross income exceeds $313,800 ($261,500 if single) Parallel tax calculation Trump Plan House GOP Plan 12, 25, 33% 12, 25, 33% 20% 16.5% Limited to $200,000 (couples […]