US Treasury Secretary Steve Mnuchin and Gary Cohn Director of the National Economic Council have explained the core principles of President Trump’s proposed tax reform.

The single-page statement sets out key themes which will be discussed on a bipartisan basis: (a) reduce individual income tax rates to three (10%, 25%,35%) and eliminate itemised deductions (except mortgage interest and charitable gifts); (b) eliminate estate tax, alternative minimum tax and the 3.8% investment income tax imposed to fund Obamacare; (c) repatriation of corporate profits held overseas; (d) a territorial system of corporate income tax that would allow US companies to pay taxes only on their domestic profits, with the tax rate reduced to 15% (which would also be the rate for partnerships and other flow-through entities); and (e) tax on capital gains and dividends to be set at 20%.

There was no mention of the border adjustment tax which is a key element of the Republican party tax proposals that has been supported to some extent by the President.

For further information, please contact Paul Hale and Enrique Clemente.