As you may be aware, the Trump Administration and Congressional Republican leaders released a nine (9) page “unified framework for fixing our broken tax code” (the Framework) on September 27th that includes specific goals for lower business and individual tax rates. This Framework builds off an earlier July 27th joint statement. While the Framework is still missing many details and leaves many questions unanswered, it highlights the Administration’s guiding principles.
The Framework contains some important guiding information on tax reform for business and individuals. However, there are still many aspects of the Framework that will impact functional areas outside of tax, especially with respect to how companies think about their deals strategy and international operations going forward. The Framework’s most relevant provisions are summarized below:
Domestic Business Provisions:
International Business Provisions:
The Framework statement marks a major milestone in efforts by President Trump and Congressional Republicans to enact the first major tax reform legislation since 1986. Tech companies have spent years lobbying for some of the proposed ideas, particularly the proposal for a territorial tax system which affects some of the biggest stakeholders in the industry who currently have billions in profits parked overseas. While offering a few specifics, the Framework ultimately leaves many difficult policy issues to be resolved by the House and Senate tax-writing committees. Significant political hurdles also must be overcome if Congress is to enact a sustainable reform of US tax law that will provide a more competitive tax system for business taxpayers.