The Latest Tax Reform Talk From Washington
The President and Congressional Republicans are feeling tremendous pressure to complete tax reform in 2017. During the August Congressional recess, senior staffers for the major tax reform decision makers were busy developing the contours of the reform plan, and they are farther along than most think.
For individuals, I see a top tax rate on wage income in the range of 35-38 percent and the overall tax cut expiring in 10 years due to budget considerations. Serious discussions are underway to limit the home mortgage deduction as a revenue raiser to offset tax rate reductions. In addition, the elimination of the deduction for state sales taxes is also likely to be included in the tax proposal when it is officially released in late September or October.
With respect to retirement plans, the tax writers are seriously considering mandating Roth after-tax treatment for employee contributions exceeding $2,500 annually. This provision would raise billions of dollars to fund lower individual tax rates. Also, related to retirement, tax writers are considering expanding the saver’s credit (government matching contribution for lower income savers) and creating a universal Roth IRA without current law eligibility limits.
I remain optimistic that tax reform will pass Congress in late 2017. For those that have been waiting for tax reform for several years, perhaps you will receive an early holiday gift.
Register for our 45-minute webinar to hear from Doug Fisher, Washington policy expert, and Boston Private pros as they discuss the latest tax reform proposal from Washington and its impact on corporations and individuals.
Boston Private is pleased to announce a partnership with Doug Fisher, a Washington Policy expert, who will offer a series of insights into a number of reform proposals making their way through Congress in 2017. Doug is Director of Retirement Policy at the American Retirement Association. In this role, Doug works with the ARA membership to protect, advise and grow their businesses through ideation and advocacy in the benefits area. Before joining ARA, Doug led Fidelity's legislative policy and thought leadership development teams involving retirement, health and welfare benefit plans. Doug has advised many Fortune 1,000 companies on the impact of legislation and regulation on the design and delivery of benefits. Before joining Fidelity, Doug served as tax counsel to the U.S. Senate Finance Committee and was involved in writing the pension, health and insurance provisions of the Small Business Job Protection Act of 1996; the Balanced Budget Act of 1997, including the Roth IRA, Simple retirement plan, medical savings account (predecessor to the health savings account); and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
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