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"Big Six" Release Tax Reform Framework

September 28, 2017

On September 27, 2017, the White House Administration and Republican leadership came together to release the highly-anticipated "Big Six" tax framework for tax reform.[1]  The 9-page outline provides few details and mimics previous White House Administration and Republican proposals..[2]

As expected, the framework features a significant rate reduction for corporations, a reduction in the number of brackets for individuals, and a doubling of the standard deduction for individuals.  Most of the proposals reflect what has already been unveiled in previous White House and Republican tax reform outlines, with the common rhetoric of simplifying the tax code and removing special interest deductions and loopholes.  Here is a summary:


  • Doubles the standard deduction to $12,000 for single filers and $24,000 for married filers, while eliminating personal exemptions
  • Consolidates the current seven tax brackets to three at 12%, 25%, and 35%
  • Increases the child tax credit
  • Repeals the individual alternative minimum tax ("AMT")
  • Retains the mortgage interest and charitable contribution deductions
  • Retains retirement tax benefits
  • Repeals the estate and generation-skipping transfer tax


  • Applies 25% maximum tax rate to the business income of businesses conducted as sole-proprietorships, partnerships and S-corporations
  • Reduces the current 35% corporate tax rate to 20%
  • Repeals the corporate AMT
  • Allows immediate expensing with respect to new investment in depreciable assets other than structures (as proposed, this provision would sunset after 5 years)
  • Partially limits the net interest expense deduction for corporations
  • Retains the research and development ("R&D") tax credit and the credit for low-income housing
  • Provides for territorial taxation with a 100% exemption for domestic corporations on dividends from foreign subsidiaries, with a transition period to tax existing accumulated foreign earnings
  • Calls for rules to prevent companies from shifting profits to tax havens by taxing the foreign profits of U.S. multinational corporations

Although the framework touts three tax brackets for individuals, the lowest bracket is higher than the current 10% bracket, but with the increased standard deduction, the intention is that such taxpayers should be at least slightly better off.  The framework also states that an "additional top rate may apply to the highest-income taxpayers to ensure that the reformed tax code is at least as progressive as the existing tax code."  It is uncertain whether the top rate envisioned would be less than the current maximum rate of 39.6%.

With respect to businesses and the 25% tax rate, the framework notes that rules will have to be adopted to prevent personal income from being re-characterized to business income.  If not, some individuals potentially could avoid the top individual tax rate by routing all income through pass-through entities.  For corporations, it is unclear how the territorial system and the 100% exemption on dividends from foreign subsidiaries will mesh with the goal to have rules for taxing the foreign profits of U.S. multinational corporations.  Previous proposals called for corporations and businesses to retain the R&D credit; this framework has added the low-income housing credit.  The prior House Republican proposal for a border adjustable tax has been removed from consideration.

For questions or more information, please contact Christine M. Green at (412) 394-2346 | or Kenneth S. Wear at (412) 394-2488 |


[1] The "Big Six" refer to Speaker of the House Paul Ryan, Senator Orrin Hatch, Senate Majority Leader Mitch McConnell, House Ways and Means Chairman Kevin Brady, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn.

[2] Unified Framework for Fixing Our Broken Tax Code, September 27, 2017, available at

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