Welcome to a discussion with one of Washington D.C.'s most connected individuals in the realm of federal tax policy, Kenneth J. Kenties. As managing director of the Federal Policy Group, he offers invaluable insights on matters related to tax legislation and their impacts on businesses and individuals alike.

Significant Changes in Corporate Tax Rates

Kamala Harris has proposed increasing the corporate tax rate from 21% to 28%, potentially raising $1.4 trillion over 10 years according to the Treasury Department. Here's what this could mean:

• An increase in revenues, influencing how government spending might adjust.
• Corporate sectors might experience financial shifts, altering market dynamics.

Unrealized Capital Gains and Other Proposals

The concept of taxing unrealized capital gains has been floated around, generating concern and discussions about its feasibility and constitutionality.

• This could also indicate potential shifts in Social Security taxation and tax deductions on tips, which are complex issues themselves.
• President Trump voiced favor toward eliminating taxes on tips and Social Security payments, bringing legislative complexities to the forefront.

Understanding potential tax changes is crucial for businesses and individual financial planning.

Expectations toward 2025-2026 Tax Legislation

Looking ahead, the future of tax bills and related legislations remains highly contingent on the outcomes of upcoming elections. The following points dive deeper into expected timelines and key legislative contentions:

1. Numerous provisions from the 2017 tax bill are set to expire by the end of 2025, affecting tax returns filed in 2026.
2. Among these is the 199A tax deduction, pivotal to pass-through entities, which could significantly increase taxable income upon expiration.
3. The SALT limitation, controversial in several states, is also among expiring provisions, potentially influencing married vs. single filers differently.

The Role of Election Outcomes

The course of future tax legislation could diverge significantly based on whether Democrats or Republicans gain complete control in upcoming elections:

• If an all-Democratic sweep occurs, expect a major tax bill under reconciliation protection, ushering changes by mid-next year.
• An all-Republican sweep could lead to their own version of a tax bill, taking a different legislative approach.

Conclusion

Navigating these potential shifts in tax policy requires keen attention to legislative changes and understanding their broader socio-economic impacts. As we continue monitoring developments, staying informed remains crucial for both taxpayers and policymakers alike.