After the U.S. House of Representatives released the details of its tax plan, our Office of Public Policy put the likelihood of tax relief at 60%, up from 55% last month. How could the House bill, "The Tax Cuts & Jobs Act," affect you, your wealth and your investment strategy?
In a new US economy report , CIO Americas, Wealth Management (CIO) notes that, if the legislation were passed as is, high-income taxpayers would receive limited personal income tax relief and potentially a modestly higher tax burden in higher-tax states. However, small business owners stand to benefit from the lower rate on "pass-through" income.
Highlights of the draft legislation include:
- The number of income tax brackets reduced from seven to four
- Changes to personal deductions, including the mortgage interest deduction
- The Alternative Minimum Tax (AMT) eliminated
- A flat corporate tax rate of 20%, down from 35%
Markets are not fully pricing in tax reform benefits, and successful passage represents an upside scenario for U.S. stocks. Overall, the proposed corporate tax changes, as written, could boost S&P 500 earnings per share by 8%–10%.
For more information on how the legislation could impact you, read the full report .
Are you prepared to act on the legislative changes coming from Washington? Together we can find an answer. Connect with your UBS Financial Advisor today or find one.