The House Ways and Means Committee released the Tax Cuts and Jobs Act (H.R. 1) on Thursday, November 2, 2017.  The proposed tax legislation covers a broad scope of topics, including, among others:

Business Provisions

• Reductions in maximum corporate tax rate to 20% beginning in 2018.
• Expensing of various business purchases.
• Repeal of AMT.
• Limit the deductibility of net interest expense.
• Repeal the domestic production activity deduction.
• Preserve R&D and LIHTC credits.

Individual Provisions

• Reduce seven brackets to four, but retain top 39.6% rate for incomes over $1.0 million. 
• Retain surtax on investment income and additional Medicare tax.
• Introduce “passthrough” rate of “no more than” 25%, with two alternative methods for allocating business income between profits and salaries. Generally of very limited benefit to professional service firms.
• Repeal AMT.
• Retain 401k deduction.
• Increase standard deduction.
• Increase family credit.
• Limit deduction for property taxes, eliminate SALT deduction , preserve most charitable deductions, limit deduction for home mortgage interest.
• Phase out estate tax by 2024.

International Provisions

• Shift to a territorial system for taxing foreign source income of multi-national business entities.
• Introduce an excise tax on payments by a US corporation to related foreign corporations.
• Introduce a “deemed repatriation” of foreign earnings.
• Taxes a US parent on 50% of certain “high returns” of foreign subsidiaries.
• Expand earnings stripping provisions.

In addition, the bill would, among other things, impose significant limitations on the tax treatment of bonds, revise the treatment of exempt organizations, and revise the taxation of insurance companies.

The bill is scheduled for mark up on Monday, November 6, 2017, with a possible vote on the House Floor as early as during the week of November 13, 2017.

This is a very comprehensive tax bill and will have challenges from many business sectors.  It is too early to make a prediction as to whether any bill will pass and what will be in the final version.

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