There is a new senate tax proposal being offered by two Republican Senators to lower corporate tax rates to 20 percent, down from 28 percent.
- To reduce the costs of the proposal, many tax deductions and allowances would be eliminated.
- President Trump proposed, during the recent Presidential campaign, that corporate tax rates be lowered to 15 percent and many in the corporate world are hoping that happens.
- ISRI secured for the industry a permanent 50 percent accelerated depreciation allowance in the first year after purchase for new recycling equipment. However, even these deductions could be on the chopping block.
- The tax reform negotiators known as the “Big Six” (Sens. McConnell, Hatch, Reps. Ryan Brady, Administration officials Cohen and Mnuchin) reportedly are moving away from such expensing and replace them with temporary provisions which would sunset.
- The “Big Six” will likely continue with the economic stimulus created by accelerated depreciation, but limit it to reduce its long-term budgets and deficits.
Why it’s important: Tax reform is eminently important to the scrap recycling industry. The tax reform situation is very fluid. It is rumored that some sort of mortgage interest deduction reform may be considered to limit the amount of interest allowed. Given the fluidity of the situation, ISRI will keep its members informed as new important tax reform developments arise. For more information, contact Billy Johnson.