President Trump unveiled his latest framework for tax reform, which stems from a collaborative effort by the so-called “Big Six,” which includes members of the Trump administration and Senate and House leaders.

The following is a quick summary of some of the main provisions of the plan, which have potential consequences for U.S. expat individuals:

• Reducing the 7 tax brackets to 3 brackets of 10%, 25%, and 35%
• Raising the standard deduction to $24,000 for couples and $12,000 for individuals
• Increasing the child tax credit amount and raising phase-out income levels
• Eliminating the personal exemption and replacing it with the higher child credit and standard deduction
• Abandoning Ivanka Trump’s plan to add a tax deduction for child care in favor of an increased child tax credit
• Retaining the mortgage interest and charitable deductions, but eliminating many other itemized deductions including the deduction for state and local taxes
• Repealing the alternative minimum tax
• Repealing the death tax and the generation-skipping transfer tax

The general approach of these reforms looks quite similar to Trump’s previously-announced tax reform plans. For an in-depth look at how these provisions may specifically affect expat taxpayers, please read our previous blog that provides a detailed analysis on a reform-by-reform basis.

It’s important to also note that the plan contains a number of corporate tax and corporate international tax reform proposals that would significantly affect U.S. businesses. These include a reduction of the corporate income tax rate from 35 percent to 20 percent. The new corporate tax would be “territorial,” i.e., foreign income earned by U.S. companies would be tax-free, and all untaxed income currently held overseas would be immediately taxed at a fixed rate.

At the international level, the plan would provide for a 100% exemption for dividends paid to U.S. companies by their foreign subsidiaries. The plan would treat accumulated offshore profits as repatriated, giving rise to a one-time repatriation tax (at a “low” rate that was not specified) that is payable over five years.

As a general matter, it’s important to note that this latest plan requires the approval of the U.S. Congress, a process that is highly politically charged and will take some time. There is also no guarantee as to which of the changes will ever come to legislative fruition.

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