Now that the election is over, many investors are focused on what’s next for policy items.
President-elect Donald J. Trump offered many proposals during his campaign that will likely serve as a starting point for negotiations with Congressional leadership.
Trump’s tax reform plan would consolidate tax brackets from seven to four (0%, 12%, 25%, and 33%), while repealing the 3.8% Medicare surtax. He proposes the repeal of the alternative minimum tax, federal estate taxes, and gift taxes. His plan would also lower the corporate tax rate to 15% and offer a one-time tax of 10% to repatriate overseas corporate profits. Trump’s plan introduces a deduction for the average cost of child care.
Social Security and Medicare
Trump does not have any specific plans to change Social Security or Medicare. He opposes any increase in the retirement age and would oppose raising the wage base for the Social Security payroll tax. He also indicated that there would be no benefit cuts for Medicare.
Repealing the Affordable Care Act was a key Trump campaign proposal. He supports the expansion of health savings accounts, and his plan would explore the purchase of health insurance across state lines.
Trump has indicated he would generally support a comprehensive infrastructure initiative. On the issue of energy, Trump would like to see a repeal of the Clean Power Plan to reduce regulations on fossil fuels. On trade, Trump has been critical of current trade deals such as NAFTA. He supports renegotiating trade terms.
It is important to note that these are proposals. Tax reform, federal spending, and policy changes require passage by Congress. Change will require negotiations between the House and the Senate.
For informational purposes only. Not an investment recommendation.
This information is not meant as tax or legal advice. Please consult with the appropriate tax or legal professional regarding your particular circumstances before making any investment decisions. Putnam does not provide tax or legal advice.