Tax Reform 2.0 Framework

The House Ways and Means Committee (the “Committee”) released a brief outline of its tax reform plan titled House GOP Listening Session Framework: Tax Reform 2.0 (the “framework”) on July 24, 2018.  House Republicans hope this long-awaited tax reform 2.0 framework, if implemented, would solidify the Tax Cuts and Jobs Act (the “TCJA”) reform by helping to create jobs in the United States, raise wages, and expand the economy. The framework would make permanent the TCJA tax changes and institute other reforms to benefit individuals and small businesses. The Committee notes that the framework is designed to build on the growing successes of the TCJA in three main ways:

Provide certainty for Americans by making permanent the individual income tax rate and deduction changes scheduled to expire in 2025: Both the Committee and the Tax Foundation, an independent, nonpartisan think tank specializing in tax policy, estimate that this would create 1.5 million new jobs, increase wages by 9%, and increase GDP by 2.2%.  The Tax Foundation also notes that annual federal revenues would decline by $112 billion dynamically. 

Promote family-friendly savings plans: Various sources estimate that  50% of working-age adults say they do not expect to have enough savings to live comfortably in retirement. Additionally, more than one in three workers do not have access to a retirement plan through their employer. Tax Reform 2.0 contains a range of proposals to help families start saving earlier and save more throughout their lives. The framework suggests that the retirement objectives can be achieved through USA (Universal Savings Accounts, which offer a flexible savings tool for families), expanded Section 529 Plans (could be used to pay for apprenticeship fees to learn a trade, pay off student debt, or cover the cost of home schooling), and through New Baby savings accounts (paradoxically), which would allow families access to retirement accounts penalty-free when having a new child, though allowing for future replenishment. These instruments are not described in much detail, but are part of the very high-level outline.

Improve start-up business innovation: While it’s unclear what provisions the House may consider, House leaders have promised to remove the tax code’s barriers to entrepreneurship, while also helping businesses to write off more of their initial start-up costs.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Automobile, Tax BY Brett Cubellis
Explaining the Transfer/Advance Payment of Clean Energy Credits and Energy Credits Online Registration
New Research and Development Capitalization Requirement Shuffles System
Contractors May Benefit From SALT Cap Workaround
2023 Legislative & Regulatory Update
Tax BY Kirk Mitchell
Can “Moore” Tax be Refunded from IRS? How to Protect Your Potential Claim for Refund of §965 Foreign Corporation Transition Tax
Fraud, Tax BY Charlotte Garraway
5 Red Flags of Fraudulent ERC Providers
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×