Congress' Proposal Calls for "eliminating the right to deduct interest payments", Bloomberg Reports

[Editor's note: 1031Gateway supports the efforts of groups like www.SaveThe1031.org, which is exposing the devastation this tax reform proposal would unleash on our economy and mobilizing Americans to make their opposition known to Congress in order to stop this bill. Please visit www.SaveThe1031.org and fill out their form to directly send individual letters to your representative and senators in Congress, urging them to fight for the 1031 exchange.]

"President-elect Donald Trump and congressmen from his party have both suggested cutting corporate tax rates. To pay for those reductions, the House Republicans’ plan calls for eliminating a key tax benefit associated with companies’ borrowing, namely the right to deduct interest payments from income...

Companies have been able to deduct at least part of their interest expenses against their income for more than a century. Eliminating that benefit would likely raise about $1.1 trillion of U.S. tax over the next decade, according to the Tax Foundation, a think tank. 

That would help offset another part of the House Republicans’ tax plan: companies would be allowed to deduct their expenses from capital expenditure in the year in which they occurred, instead of spreading them out over a longer period of time... The Tax Foundation estimates that switching to immediate deduction will result in $2.2 trillion of lost revenue."

Claire Boston, Bloomberg

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