On February 12, 2025, the House proposed a budget resolution that earmarked up to $4.5 trillion for tax cuts over the next ten years.  While the House has yet to elaborate on specific tax cuts or legislation, a widely reported, leaked internal House memorandum (the Memorandum) from last month provides a high-level overview of the universe and budgetary impact of various tax cuts and increases that the House is considering.  At this time, it is unclear which of the Memorandum’s tax proposals, if any, would be proposed in the House’s budget.  However, the budget resolution’s sizable allocation for tax cuts suggests that future tax legislation will likely consist of both tax cuts as well as tax increases to offset budget shortfalls.  Until more guidance is released, taxpayers should familiarize themselves with the Memorandum’s business and individual tax proposals set forth below.

Business and Corporate Tax Proposals

• Reducing the corporate income tax rate from 21% to as low as 15%;
• Eliminating the Corporate Alternative Minimum Tax, which subjects certain large corporations to a 15% minimum tax on their adjusted financial statement income and is discussed further here;
• Repealing the Inflation Reduction Act of 2022’s various green energy tax credits, which are discussed further here, here, here, and here;
• Imposing a 10% tariff on all imports;
• Repealing amortization of R&D expenses and allowing immediate expensing thereof;
• Taxing credit unions on their earnings; and
• Eliminating hospitals’ non-profit status and taxing hospitals as for-profit businesses.

Individual Tax Proposals

• Modifying the $10,000 limit on state and local tax ("SALT") deductions by (i) eliminating the SALT limit, (ii) increasing the SALT limit up to $15,000 ($30,000 for married filers), or (iii) eliminating the SALT limit while also narrowing the SALT deduction to property taxes only;
• Limiting the residential mortgage interest tax deduction by (i) eliminating the deduction for the primary residence or (ii) reducing the applicable mortgage debt subject to deduction from $750,000 to $500,000;
• Imposing a so-called Border Adjustment Tax, a tax based on where goods are consumed;
• Eliminating the estate tax;
• Taxing interest received on state and local municipal bonds;
• Allowing deductions for auto-loan interest;
• Reducing U.S. taxes paid by U.S. citizens living abroad by (i) increasing the current exclusion on foreign-earned income or (ii) exempting all foreign-earned income from taxation;
• Taxing employees on various employer-provided fringe benefits (e.g., meals, on-site gym, etc.);
• Eliminating taxes on tips;
• Eliminating taxes on overtime pay; and
• Eliminating various credits, including (i) credits for child and dependent care, (ii) the Lifetime Learning Credit, and (iii) the American Opportunity Tax Credit.