As Republicans hold control of the executive and legislative branches, comprehensive reform of the tax code is one of their top policy priorities. While they agree on the need to reduce the corporate tax rate and reform the system, Republicans have yet to unite around a specific provision or path forward. To learn more about the legislative outlook for tax reform, read on!
Discussions of tax reform in the 115th Congress have reflected the “blueprint” House Republicans introduced in June 2016, “A Better Way—Our Vision for a Confident America.” The blueprint would make significant tax code changes for business and individual taxpayers, but the fate of many provisions remains unclear. President Trump’s plans for tax reform similarly have an unclear path forward. It is possible he will not propose actual legislation, instead adopting the approach of President Reagan and laying out a set of principles such as his “Made in America” tax plan, significantly cutting the corporate tax rate, and eliminating the estate tax. We will likely have better insight into his tax proposals when he delivers his first address to Congress this evening, February 28.
While the executive path brings uncertainty, we can expect to see great debate on the House blueprint’s proposed border adjustment tax (BAT), which would raise approximately $1.3 trillion in revenue. House Speaker Paul Ryan (R-WI) is currently leading efforts to triangulate the various tax reform proposals. To read more about these House discussions and further details that will play a significant role in the fate of tax reform, read the recent update from ML Strategies.