U.S.A. Douglas Myser, CEO, Federal Tax Resolution
National Tax Reform
was one of the cornerstones of President Trump’s promises and pledges during the Presidential campaign, that a major overhaul would occur of both personal and corporate national tax reform. He re-iterated those sentiments during the Presidential Debates, alluding to the fact that the United States was failing in the world, to some degree, due to tax structure, which made us less competitive. He cited statistics that assured us that if we lowered the corporate rate, we would see an influx of jobs coming into the United States, and that large corporations that had parked sizable amounts of money from the profits of those companies, would reinvest those very same profits back into the United States, if given an amnesty period without severe penalties. National tax reform it seemed was finally going to happen, and was going to have a positive impact upon our economy. Most everyone thought those ideas would be good.
Several ideas were mentioned, including the “border adjustment” tax idea. This idea was meant to put tariffs on goods coming into the country, making it easier to produce and sell those goods here in America. But after looking at it closer, and realizing that the cost would be borne primarily by lower income individuals, and getting push back by importers including Wal Mart, it seems the idea went into the dumpster. So where did tax reform go after that idea went downhill. Nowhere. The reason for that was the debacle over the Affordable Care Act. Since the Republican controlled Congress could not come up with a alternative to Obamacare, the taxes attached to Obamacare remain intact. That changed the outlook and dynamic of national tax reform substantially going forward.
So it seems at this point that a grand, all encompassing tax reform program will not happen in this administration. Without substantial tax cuts from Obamacare, that is simply impossible. The real question for America is, can this Administration muster enough votes to pass a meaningful national tax reform package for both individuals and businesses, that will propel our economy forward with increased international competition ?