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Tax Reform Framework: A Summary & Observations



Annette Nellen, Tax Advisor

On September 27, 2017, the Big 6 released their Tax Reform framework to guide the drafting of Tax Reform Legislation. Here is my summary and observations.

The plan also states President Trump’s Four Principles of Tax Reform:

  1. Simple, fair, easy to understand
  2. Give American works a pay raise.
  3. Make America a jobs market of the world
  4. Bring back trillions of dollars of unrepatriated earnings

 

 

Have a question? Contact Annette Nellen 

Your comments are welcome!

Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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One comment

  1. Kat Jennings says:

    COMMENT SUBMITTED TO TAXCONNECTIONS REGARDING THIS POST:

    Hi Annette Nellen,

    Your Summary & Observations on TAX REFORM (below) are excellent in addressing certain issues, such as the repeal of medical expense deduction—my specific case. I calculated my 2017 Form 1040 (estimated figures based on actual 2016) using the TAX REFORM rules (NO medical expense deduction) and using proposed tax brackets and I ended up with a tax increase of some 70% for Federal only; I expect California to follow suit (I live in Los Angeles County, CA), thus very likely resulting in some 100% tax increase in Federal and CA for me and my spouse. We are elderly, over 80 years old, and incur inordinately high medical expenses because of dementia condition for my spouse and other condition for me. You stated in your comment re repeal of medical expense: “Repeal of medical expense and casualty loss might adversely (IMPACT) taxpayer’s ability to pay”. In my case, MIGHT would turn to WILL adversely impact my ability to pay…..

    I wrote to AICPA re my situation re impact of repeal of medical expense deduction and I was disappointed when Melissa Labant of AICPA responded to my email with her email dated June 16, 2017, stating in part: “However, in the broader scope of tax reform, we have not advocated for retaining the medical expense deduction as opposed to the casualty loss provisions, for example.” I am appalled at this approach, where elderly taxpayers with high medical expenses (numbering in the millions) are virtually thrown under the bus….. This approach is an inelegant way of saying: “you have lived too long—you may leave this planet, please….

    Annette, in your comment re worldwide taxation being replaced with territorial taxation, I think you have reversed the phrase “need to change due to the shift to a worldwide tax system”; it should read “ shift to a territorial tax system. I am sensitive in the area of international taxation because of my vast experience in this field in the last century…….

    Best regards

    Dro Amirian
    Associate Member TEI, Past President of TEI Los Angeles Chapter
    Los Angeles County, CA

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