| | Trump | House GOP |
Top corporate tax rate (now 35%) | 15%, corporate AMT eliminated | 20%, corporate AMT eliminated |
Top pass-through rate (now 39.6%) | 15% rate within the personal income tax system for pass-through entities that want to retain profits within the business | 25% |
Taxation of future foreign earnings | In September 2015, proposed immediate worldwide taxation, repeal of deferral; unclear if he still supports | - Territorial, 100% exemption for dividends paid from foreign subsidiaries - Border tax adjustment mechanism |
Mandatory tax, untaxed accumulated foreign earnings | 10% | 8.75% for cash/cash equivalents, 3.5% otherwise, payable over 8 years |
Cost recovery | Expensing for manufacturers | 100% expensing of tangible, intangible assets |
Interest | Manufacturers electing to expense capital investment lose the deductibility of corporate interest expense | No current deduction will be allowed for net interest expense |
Other business provisions | Calls for them to generally be eliminated, except for research credit | Calls for them to generally be eliminated, except for research credit and LIFO |
Individual rates (now 10%, 15%, 25%, 28%, 33%, 35%, 39.6%) | 12%, 25%, 33% | 12%, 25%, 33% |
Capital gains | -Existing capital gains rate structure (maximum rate of 20%) -3.8% Net Investment Income Tax (NIIT) repealed | 50% deduction for capital gains, dividends, and interest, leading to basic rates of 6%, 12.5%, and 16.5% |
Dividends | Existing rates but NIIT repealed |
Carried interest | Ordinary income | (Not addressed) |
Estate tax (now 40% rate, $5.45 million exemption) | Repealed, but capital gains held until death will be subject to tax, with the first $10 million tax-free | Repealed |
State tax deduction | Cap itemized deductions at $100,000 for single filers and $200,000 for couples | Eliminated |
Charitable contribution deduction | Retained, but could be modified |
Mortgage Interest deduction | Retained, but could be modified |
Dependent care expenses | - Deduction for care expenses, up to 4 children, elderly dependents, capped at the average cost of care for state of residence - Available to those earning $250,000 per year or less for individuals, $500,000 couples | - Child credit and personal exemptions for dependents consolidated into an increased child credit of $1,500 - First $1,000 will be refundable as under current law - Non-refundable credit of $500 also will be allowed for non-child dependents |
Personal Exemption Phase-out (PEP), and Pease limitation on itemized deductions (now apply for families with income over $311,300, individuals over $259,400) | Unspecified "steepening the curve" of PEP and Pease | (Not addressed) |
Personal AMT | Eliminated | Eliminated |
Life insurance build-up | Included in income for high earners | (Not addressed) |
