GOP Tax Reform Framework Retains LIHTC, Proposes 20 Percent Corporate Rate

The Trump administration and congressional leadership today jointly released a tax reform framework  and highlights summary that would set the top corporate tax rate to 20 percent and eliminate the corporate alternative minimum tax (AMT). The pass-through rate would be set at 25 percent with measures to ensure that personal income and wages are not re-characterized as profits. The framework envisions eliminating most business credits, including the new markets, historic and renewable energy tax credits, but explicitly retains the low-income housing tax credit (LIHTC) and the research and development tax credit. It also calls for immediate expensing of assets for new investments made after Sept. 27, 2017, for at least five years (not including buildings), while “partially limiting interest deductibility.” The tax-writing committees were encouraged to examine a 40 percent corporate dividend payment deduction to reduce double taxation of profits. A detailed analysis of the framework can be found on the Notes from Novogradac blog.