President Donald Trump and Republican leaders introduced their long-awaited tax reform plan on Wednesday. As expected, the plan calls for a significant cut to the corporate tax rate, from 35% to 20%, and the elimination of four of the seven individual tax brackets, creating brackets of just 12%, 25% and 35%.
“This is a revolutionary change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven’t seen in many years,” Trump said in a speech at the Indiana State Fair Grounds.
The plan would also create a “pass-through” provision which would tax certain small businesses at a rate of 25% rather than as personal income. For workers, the plan doubles the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly. The alternative minimum tax and the estate tax would be eliminated.
According to Bloomberg, “the framework aims … allow new investments to be expensed (‘for at least five years’), ‘partially; limit the deduction for interest, and repeal or restrict ;numerous other special exclusions and deductions.’ In the future, U.S. firms could bring home dividends from foreign subsidiaries tax-free; past earnings accumulated abroad would be treated as repatriated and taxed as such.”
It’s impact on trucking companies, many of whom are smaller businesses, remains uncertain as specific details – including how to pay for the tax cuts – is not included in the document.
Did you know?
Even though the number of trucks listed on its load board rose 5% last week, the load-to-truck ratio remains elevated at 6.4 loads per truck, said DAT. Overall, van loads rose 4% for the week ending Sept. 23, with the national average spot truckload rate rising 1 cent to $1.94/mile for vans.
“Our shared goal of a safer transportation system is a top priority. These grants will further assist state and local officials in their efforts to prevent commercial motor vehicle crashes and injuries each year, and have the potential to save hundreds of lives.”
– Elaine Chao, Transportation Secretary, on the awarding of $70 million in grants to support driver training and safety efforts in states
In other news:
Trump backs off private investment in highways
After pushing for public-private partnerships dating back to his campaign, President Trump told Republican lawmakers he no longer favors that approach. (Wall Street Journal)
Startup delivery company shutting down, maybe
Doorman, a startup package delivery company that allowed customers to schedule deliveries is “joining forces with a larger team,” it said, telling customers it will no longer be delivering packages. (TechCrunch)
Weighing the ELD impact on insurance
While the implementation of ELDs should improve fleets’ safety profiles, their impact on insurance rates is uncertain, according to leading insurers. (Fleet Owner)
Tank carriers seek 5-year exemption from rest break rule
The National Tank Truck Carriers has asked FMCSA to exempt carriers transporting petroleum-based fuel from the required 30-minute rest break for five years. (Transport Topics)
FMCSA provides grant money for training
FMCSA has issued more than $70 million to states and training schools to train new drivers, including military members. (CCJ)
The long-awaited Republican tax plan released Wednesday provides a basic outline of how tax reform may proceed. For businesses, it looks promising, but as with any initial plan, it is the committees in Congress that must write the law and it remains to be seen how those committees will achieve these broad goals.
Hammer down everyone!