President calls for tax reform, territoriality | KPMG | GLOBAL

President calls for tax reform, territoriality in speech

President calls for tax reform, territoriality

President Trump today in a speech given in Bismarck, North Dakota, said that passing tax cuts and tax reform would give the United States a competitive edge in the global market and would rebuild the economy and create more jobs.

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The president said that the U.S. tax code was outdated and that it was a “massive barrier” to the growth of the U.S. economy. He said that there would be more details coming “in the next two weeks.”

 

Trump reiterated the following points for tax reform:

  • Providing a tax code that is simple, fair, and easy to understand, and allowing some 90% of workers to file a “single page” tax return
  • Cutting taxes for middle class families—with lower tax rates, and increased standard deduction and child tax credit  
  • Cutting the corporate income tax rate as much as possible but “ideally” a rate of around 15%
  • Providing a special tax rate on income earned by small businesses 
  • Repatriating foreign earnings “parked” overseas
  • Moving to a territorial system of taxation (and ending the current worldwide system)
  • Repealing the estate tax

KPMG observation

The president explicitly called for a shift to a territorial system of taxation—something the “Big Six”* did not clearly do in their statement of agreed upon principles released in July. Read TaxNewsFlash-Tax Reform

* House Speaker Paul Ryan (R-WI), House Ways and Means Committee Chair Kevin Brady (R-TX), Senate Majority Leader Mitch McConnell (R-KY), Senate Finance Committee Chair Orrin Hatch (R-UT), National Economic Council Chair Gary Cohn, and Treasury Secretary Steve Mnuchin

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