2017Issue3_Alabama_v4

Figure 2

Of course, Figure 1 just gives you the dollar amount that the BAT will add to your tax bill. The other pieces of the House blueprint will also need to be modeled or considered to give an overall picture of what the proposal might mean for a company. So a more complete model might look like Figure 2. ■ Note: Pass through owners may also want to consider that the House plan will also repeal the estate tax and the impact that might have on their planning and expenses. This initial House Republican tax reform blueprint is available at: www.bit.ly/28VOwvf

House Proposal with additional Provisions

Income Subject to Federal Tax (Current Law)

Add Other Deductions (Other than R&D credit) Subtotal - Income Subject to Federal Tax Tax Rate (20% or 25%)

$

+ $

Add COGS for Imports

+ $

$

Subtract Current Export Income

– $

– $

Add Interest Deduction Taken Subtract Capital Investments (100% Expensing)

+ $

Federal Income Tax Owed

$

– $

25

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