Posts Tagged ‘tax reform’

A few summers ago, my wife and I marked our ten-year wedding anniversary with a three-day getaway to Block Island. Our first night on the island, we went out to dinner, and while we awaited the arrival of our food, my wife shared the story of friend who had recently gotten a new job, and when she and her husband arrived at the restaurant that night to celebrate with dinner, the husband had thoughtfully arranged to have a bottle of champagne waiting at the table with a note that read, “Congratulations!”

Maybe my wife meant that as a hint; maybe she didn’t. That’s when it dawned on me: Ten years is a big deal. There are expectations involved. I should probably live up to them.

In recent days, President Trump found himself in the same uncomfortable situation I endured at that table in Block Island. Soon to mark his 100th day in office, he realized that he had done nothing to fulfill his promise to deliver a “phenomenal tax plan.” So as I did during dinner with my wife, the President scrambled for the best solution he could: a rushed, half-hearted gesture meant merely to meet his minimum obligations. There was no plan. There were no details. There was, quite literally, a one-page release with a handful of bullet points, that only served to raise more questions than answers.

But before we get to those questions, let’s take a quick look at the “plan.”

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Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

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The flames had not yet cooled on the American Health Care Act — the GOP’s seven-years-in-the-making plan to repeal and replace Obamacare — before Republican leaders had moved on to its next top priority: tax reform. And from that emphatic pivot was born a golden moment for people like me; after all, it’s not often that tax law rises to the forefront of the public consciousness. But that’s where we’re heading…maybe for mere weeks, but possibly for months or — dare I say it? — years. A time where discussions of deductions and talk of tax brackets will dominate newspaper pages, Facebook timelines, and Twitter feeds.

Sure, these rare moments serve as career validation for people who have made the ill-advised choice to spend their lives in the bowels of the tax law, but debates over reform of those laws shouldn’t be preserved solely for us. Everyone should get in on the fun, and to that end, here’s a little primer for you: five headlines you’re sure to read about tax reform as the process unfolds.

Continue reading on Forbes.com

Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

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Time’s up.

On February 9th, President Donald Trump made the following promise:

“We’re going to be announcing something over the next, I would say, two or three weeks that will be phenomenal in terms of tax.”

Now, say what you will about Trump’s presidency, but to date, he’s followed through on his promises. He said we’ll have a wall? We’re getting a wall. He said he’d keep terrorists out? He’s enacted sweeping — and potentially unconstitutional — immigration reform. Twice. He said he’d drain the swamp? He…well, two out of three ain’t bad.

But where’s the tax plan? Drastic individual and business tax cuts were a huge part of Trump successful campaign, but in the first 50 days of his presidency, he has produced nothing.

What’s the holdup?

Continue reading on Forbes.com.


Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

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In President Trump’s recent speech to Congress, he said very little about his much-anticipated plan for tax reform. One thing he did say was this:

We will provide massive tax relief for the middle class.

This promise was surely met by cheers from coast to coast, as it should have been. But it raises an interesting question: how does a middle-class taxpayer measure whether the President delivers on his promise? Do you simply view the tax cuts for the middle class in isolation? Or must the cuts be viewed in their larger context, relative to those bestowed upon the richest Americans?

Continue reading on Forbes.com.


Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

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The presidential election is a mere nine months away, and while the man to represent the Republican party in its quest to unseat President Obama is still anyone’s guess, most pundits agree it will come down to either former House Speaker Newt Gingirch or Mitt Romney, the former Governor of Massachusetts. 

While the months to come will surely flush out each candidate’s stance on hot-button issues like foreign policy, homeland security, and public breastfeeding, we here at Double Taxation concern ourselves with tax law, and only tax law. And though both Gingrich and Romney have found their personal tax returns at the center of controversy in the past few weeks, we’re of the view that not enough attention has been paid to the tax proposals each candidate would seek to implement should they be elected president. 

As a result, we’ve culled through each candidate’s published proposals and campaign rhetoric in an attempt to create a comprehensive comparison of their respective plans for tax reform, culminating in this “Tale of the Tax Tape,” if you will. We’ll spare you the commentary, however, as the determination of the “best” plan requires an independent analysis based on each individual voters” political, social, and religious values.  

Newt Gingrich

Comparison of Key Tax Considerations

Mitt Romney

Remain at 35%; 15% if optional “flat tax” is elected (see fn iv)

Top Ordinary Rate[i]

Remain at 35%
Remain at 15%; 0% if optional “flat tax” is elected (see fn ii)

Long Term Capital Gains Rate [i]

0% for taxpayers with AGI < $200,000; 15% for everyone else
Remain at 15%; 0% if optional “flat tax” is elected (see fv ii)

Qualified Dividends Rate [i]

0% for taxpayers with AGI < $200,000; 15% for everyone else.
Taxed at ordinary rates; 0% if optional “flat tax” is elected (see fn ii)

Rate on Interest

0% for taxpayers with AGI < $200,000; ordinary rates for everyone else.
Offer individual taxpayers an optional 15% flat tax[ii] Please see footnote ii, as this is a critical part of the Gingrich tax platform.

Tax Code Reform

Start with the Bowles-Simpson Commission[iii] approach; lower rates and broaden the tax base

Estate Tax[iv]

Maximum 12.5% rate

Corporate Income Tax[v]

Maximum 25% rate
Switch to a “territorial system[vi]

International Tax Reform

Switch to a “territorial system”
Full expensing of capital expenditures permitted

Capital Expenditures

100% bonus deprecation extended  1 year
No tax on corporate capital gains; eventually replace payroll tax with personal accounts


Would end the American Opportunity tax credit for college education; lower payroll taxes

[i] Neither Gingrich nor Romney propose to allow the Bush tax cuts to expire. Were they to expire, the top ordinary income rate is slated to return to 39.6% on January 1, 2013. In addition, qualified dividends will again be taxed at ordinary rates — as opposed to the current 15% — and long-term capital gains will be taxed at a 20% rate as opposed to the current 15% rate.

[ii] In what may be the most important aspect of Gingrich’s plan, taxpayers could elect to forego the complexities of the Code in favor of a flat 15 percent tax rate regardless of income. Under this alternative calculation, all capital gains, interest income, and dividends would be tax-free, while nearly all deductions and credits would be abolished, except for the deductions for mortgage interest and charitable contributions and the earned income, child and foreign tax credits. The AMT would be eliminated, and all taxpayers would have the option of a $12,000 standard deduction. The idea is to create simplicity; taxpayers would be able to pay their taxes by mailing a postcard to the IRS with the necessary calculation, thereby saving considerable time and professional fees.

[iii] Bowles-Simpson was a presidential commission created by President Obama in 2010 to propose ways to cut the federal deficit. From a tax perspective, the commission attempted to simplify the Code while simultaneously raising tax revenue by eliminating many tax deductions.

[iv] The estate tax is currently at 35% for 2011 and 2012, but is slated to return to a 55% rate in 2013.

[v] The maximum corporate income tax rate is currently 35%.

[vi] A territorial systems is one in which income is taxed only in the country in which it is earned. Under its current “worldwide” system, foreign affiliates of American companies are generally taxed on income in their host country. When the earnings are repatriated from the foreign affiliate to a U.S. corporation, tax is paid a second time to the U.S., with a credit given for the tax paid abroad.

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