Close
Close

Democrats unveil proposals to roll back tax reform

RFP
Tax Hot Topics newsletter Democrats have released a pair of proposals that would reverse major aspects of the recently enacted tax reform bill, the Tax Cuts and Jobs Act. The proposals would undo the international changes and fund new infrastructure spending with an increase in both corporate and individual rates.

The initiatives stand little chance of enactment this year and are largely about messaging in advance of the November elections. They signal that Democrats intend to make reversing the tax changes a key tenet of their campaign platform.

The No Tax Breaks for Outsourcing Act was introduced by Rep. Lloyd Doggett, D-Texas, and Sen. Sheldon Whitehouse, D-R.I., and would essentially tax foreign income immediately at full U.S. rates by expanding the new minimum taxes enacted as part of tax reform. Senate Democrats meanwhile re-launched and infrastructure initiative that would be funded by:

  • Raising the corporate rate from 21% to 25%
  • Raising the top individual rate from 37% back to 39.6%
  • Reinstating the corporate alternative minimum tax and 2017 individual AMT exemptions
  • Reversing the increase in the estate and gift tax exemption

The bills are unlikely to go anywhere with President Donald Trump in office, but could emerge as major issues when the midterm election races heat up. Democrats should be expected to unveil other proposals in the coming months attacking parts of the tax reform bill.

Contact Dustin Stamper
Director, Washington National Tax Office
T +1 202 861 4144

Shamik Trivedi
Senior Manager, Washington National Tax Office
T +1 202 521 1511

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.