Taxes were one of the biggest differences in the 2016 Presidential race. Now that Donald Trump has won the election there are changes ahead. His corporate tax policies—which are vital to his platform of domestic growth and repatriation of U.S. income and jobs—will require significant changes to the Internal Revenue Code. Business leaders should familiarize themselves with these proposed changes well before Trump’s inauguration to fully explore the opportunities and risks associated with each corporate tax policy.
Here’s a brief summary of Trump’s top six proposed corporate income tax policies as listed on the Trump/Pence Tax Plan website.
Changes to Business Income Taxes
- Reduces the corporate income tax rate from 35 percent to 15 percent.
- Eliminates the corporate alternative minimum tax.
- Allows firms engaged in manufacturing in the U.S. to choose between the full expensing of capital investment and the deductibility of interest paid.
- Eliminates the domestic production activities deduction (section 199) and all other business credits, except for the research and development credit.
- Enacts a deemed repatriation of currently deferred foreign profits, at a tax rate of 10 percent.
- Increases the cap for the tax credit for employer-provided day care under Sec. 205 of the Economic Growth and Tax Relief Reconciliation Act of 2001 from $150,000 to $500,000 and reduces its recapture period from 10 years to 5.
Taking R&D tax credits is an important component of a competitive business strategy.
Questions about the changing tax landscape? Contact one of our R&D professionals today to find out more.