“We will see a tax cut this year and maybe reform,” Andy Friedman of the Washington Update told a crowd of about 2,000 independent advisors and 2,000 other guests Thursday at the Raymond James national conference in Orlando.
His remarks came one day after the White House unveiled a plan to drop the corporate tax rate to 15% from 35% and simplify individual tax rates.
The veteran political commentator and popular speaker says the tax reform process is highly controversial. “Tax simplification is very complicated stuff,” explained the Washington, D.C.-based analyst and former tax attorney.
(Related: White House Unveils Trump’s First Tax-Cut Bid)
“Keep an eye on this,” he said, adding that the battle for tax reform this year will be “very, very tough. But at least we should see a tax cut, … and we could see retroactive rates that go back to last January.”
As for the precise level of the new corporate rate, Raymond James Chairman and CEO Paul Reilly believes that the 15% will not go through.
“That is a very big cut,” Reilly said in an interview. “Fifteen percent is pretty low, so will that proposal be used to negotiate a different figure? We will see. There appears to be bipartisan support in the mid-20s.”
Trump also proposed a lower tax rate for pass-through entities, like S-Corps, partnerships and LLCs, which could potentially mean some independent advisors (and teams) could see their business taxes fall to 15%.
“That S Corp. proposal was a bit of a surprise,” Reilly said.
Friedman says the pass-through plan “is a very generous provision.” The House of Representatives, he adds, wants it taxed at 20%