Treasury Secretary Steven Mnuchin floated the idea of not giving accounting firms the same tax cuts that companies like manufacturers would get under the Trump administration’s tax reform plan.
Mnuchin distinguished between the lower tax rates that would be available to corporations that supposedly create more jobs than pass-through businesses and partnerships, such as accounting firms.
“If you’re an accountant firm and that’s clearly income, you’ll be taxed an income rate, you won’t be taxed a pass-through rate,” Mnuchin said at the Delivering Alpha conference in New York on Tuesday, according to The Wall Street Journal. “If you’re a business that’s creating manufacturing jobs, you’re going to get the benefit of that rate because that’s going to be passed through to help create jobs and better wages.”
The same policy could apply to other professional services firms such as law firms and investment firms, according to the Washington Post.
Accounting Today reached out to the American Institute of CPAs for a reaction, but the AICPA is taking a wait and see approach. “We aren’t in a position to comment until we’ve seen actual language for such a plan,” said AICPA spokesperson Shirley Twillman.
The AICPA weighed in with lawmakers on a set of its tax reform priorities last November after the election (see AICPA outlines tax reform priorities).
Republican leaders plan to unveil a framework for their long-awaited tax reform plan the week of Sept. 25, according to House Ways and Means Committee chairman Kevin Brady, R-Texas (see Brady says GOP tax overhaul framework is coming week of Sept. 25). The Trump administration wants to lower the corporate tax rate to 15 percent, according to White House budget director Mick Mulvaney. It also hopes to lower rates for individuals and pass-through businesses to an unspecified level. Trump has also called for reducing the number of tax brackets from seven to three, at 10, 20 and 25 percent, in his most recent tax plan goals document.