Most Tax Executives Believe Tax Overhaul is On the Wayby
What are the chances for significant tax reform in 2017? If you believe those who responded to a new survey on tax policy, there’s a strong possibility that our nation’s lawmakers will get the job done pretty soon – either this year or next. The mood has shifted dramatically since the beginning of the year.
Miller & Chevalier, a leading Washington, DC law firm, and the National Foreign Trade Council (NFTC) just released their 11th annual Tax Policy Forecast Survey. Business tax executives in various industries across the United States were asked to complete a short questionnaire measuring their perspectives on tax policies for the business sector in 2017. Miller & Chevalier and the NFTC then analyzed their responses and presented their findings in the forecast.
Initially, respondents indicated that repealing and replacing the Affordable Care Act, the massive healthcare law known as Obamacare, appeared to be the top priority of Congress. Certainly, that was the message conveyed by President Trump when he entered office in January. However, the House GOP leadership abruptly scrapped proposed legislation replacing the Affordable Care Act in March when it became clear they didn’t have the votes needed for passage.
Next up is tax reform. Now that the main focus has shifted away from the Affordable Care Act, 84 percent of the tax executives surveyed said they believe tax reform legislation will be enacted either in 2017 or 2018. It’s the first time in more than a decade that there has been this much optimism expressed in the C-suite, the survey noted.
During his campaign, President Trump outlined several key tax reform proposals, which were periodically updated on his website. In addition, Republicans in the House developed their own tax reform “blueprint” in 2016, which mirrors some of Trump’s proposals while modifying others and adding new ones. Obviously, the tax executives who participated in the survey think there’s enough common ground for enactment.
The report includes the following noteworthy items:
- Forty-two percent of respondents predicted a reduction of the top corporate tax rate to 25 percent, down 10 percent from the current 35 percent rate. But that’s still 5 percent higher than the 20 percent rate proposed in the House blueprint. Respondents seemed skeptical that Congress can pass a rate that low.
- Despite Republican control of both chambers of Congress, 26 percent see the lack of bipartisan support as the greatest impediment to tax reform. If past history is any indication, bipartisan efforts will be needed to complete sweeping tax law changes, similar to the situation in 1986.
- Twenty-two percent of tax executives say the most important measure they are watching with respect to tax reform is the controversial border-adjustment proposal in the House blueprint. This was followed closely by an insufficient reduction in the statutory corporate tax rate (21 percent) and limits on interest deductions (20 percent).
Business tax executives seem confident that a major tax overhaul is more than a pipe dream, but it will require cooperation between Trump and members of Congress to make it a reality.
To further complicate matters, the White House just announced that the president intends to go “back to the drawing board” on a tax reform plan, most likely delaying any legislation. Expect more twists and turns along the way.
Business Leaders Optimistic for Tax Reform … in 2018
How Trump’s Tax Proposals Would Affect Individuals
How Trump’s Tax Proposals Would Affect Businesses
How Trump’s Estate Tax Plan Might Impact Families
House GOP Makes the Case for Border-Adjustment Tax
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...