Media, Law & Policy

Republican Tax Plan is “An Interesting Start”

Thursday, November 2, 2017, By Sawyer Kamman
A professor of practice at ºÚÁϲ»´òìÈ,  has a private accounting and legal practice that focuses on tax preparation, tax representation before the IRS and New York state, real estate law, business law and estates and trusts. Petosa calls the Republican tax plan released today “an interesting start” and is available to offer further insights.
“Overall I think this plan is balanced,” says Petosa. “It keeps high income earners with a significant tax burden 39.6% (plus a state burden which in NY would approximate 6-9% and potentially no or a limited ability to deduct this amount so truly a 45+% burden), a limitation on deductions for expensive homes and a limitation or elimination of income tax deductions in high tax states (maybe those high tax states need to rethink how they pay for their governmental activities as compared to lower taxed states) while at the same time making it easier for many middle class families to file their tax return and lower their overall tax impact.”
“The provision that is a terrific change is elimination of the alternative minimum tax,” says Petosa. “This tax was meant to cause people like the President to pay a minimum amount on their earnings, however, as a practitioner the Alternative Minimum Tax affected all of my clients who made more than $125,000 because the exemptions have not been properly increased over time.  I would submit that people making $125,000 would be considered the middle class in today’s standards and so a tremendous relief will be provided.  Further, the complexity of this computation is extraordinary.”
“The 25% tax rate on Main Street Job Creators is an interesting concept,” says Petosa. “Since we know that 80% of new job creation is small business it would give an incentive to owners of S corporations, LLC’s and Partnerships to invest in expansion because instead of a 39.6% rate a break down to 25% could be quite impactful on job creation and investment.”
“More details are necessary to fully understand the impact of the changes (such as what are the income levels for the new tax brackets), but it is an interesting start,” says Petosa.
ºÚÁϲ»´òìÈ faculty are available to speak to media via phone, email, Skype, or LTN studio. Please contact Scott McDowell, executive director, regional strategic communications at semcdowe@syr.edu or 212-826-1449 or Ellen James Mbuqe, director of news and PR at ºÚÁϲ»´òìÈ, at ejmbuqe@syr.edu or 315.443.1897.