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One of the main tenets of supporters of President Trump — both before the election and afterward — was that corporate (and perhaps individual) tax reform was coming soon to a 1040 form near you. But as we saw with healthcare reform between the White House and Congress failing to launch last month, perhaps enacting such policy will prove to be more difficult than the rhetoric might suggest.
The tax reform table being set at present looks to be pitting separate ideological sides of the GOP against one another: the Supply Siders vs. the Deficit Hawks. Reaganesque supply-side economics tends to be fine with higher near-term deficits, arguing the wealth gained from such policy makes up for those losses. Those charged with protecting ballooning deficits will want to be satisfied that new policy doesn’t delve into irresponsibility.
There is a trillion-dollar deficit looming on the horizon, after all, and this limits what the country can do economically. And this is before bringing up aspects of new tax reform proposals such as a border adjustment tax, which Texas Chairman of the House Ways & Means Committee Kevin Brady suggests will be part and parcel with new tax laws. Tennessee Senator Bob Corker doesn’t necessarily see it this way, and says tax reform may prove more difficult even than the star-crossed healthcare reform legislation has been so far.
Tax reform on this scale has not even been attempted since Ronald Reagan was President, more than 30 years ago. A couple windfall tax breaks under the George W. Bush administration notwithstanding, restructuring the entire policy requires some heavy lifting. There are signs suggesting the Trump administration has not yet proven itself up to the task; Reagan’s team spent 10 months and wrote up nearly 1000 pages of documents before pushing tax reform policy through Congress.
Today, President Trump plans to hold a CEO summit to discuss a possible tax deal, and we may presume those guests invited — including executives from Citigroup (C - Free Report) , Blackstone (BX - Free Report) , General Electric (GE - Free Report) and Vornado (VNO - Free Report) , among others — might be asked whether pushing new reforms seems viable at some point this year. Many analysts are currently throwing shade on this idea, and think 2018 is the earliest possible time we might see some real progress on this initiative, but perhaps a meeting of the minds today will provide some sort of useful breakthrough, both for the Trump administration as well as the U.S. economy overall.
Image: Bigstock
Is Tax Reform Possible in 2017?
Tuesday, April 4, 2017
One of the main tenets of supporters of President Trump — both before the election and afterward — was that corporate (and perhaps individual) tax reform was coming soon to a 1040 form near you. But as we saw with healthcare reform between the White House and Congress failing to launch last month, perhaps enacting such policy will prove to be more difficult than the rhetoric might suggest.
The tax reform table being set at present looks to be pitting separate ideological sides of the GOP against one another: the Supply Siders vs. the Deficit Hawks. Reaganesque supply-side economics tends to be fine with higher near-term deficits, arguing the wealth gained from such policy makes up for those losses. Those charged with protecting ballooning deficits will want to be satisfied that new policy doesn’t delve into irresponsibility.
There is a trillion-dollar deficit looming on the horizon, after all, and this limits what the country can do economically. And this is before bringing up aspects of new tax reform proposals such as a border adjustment tax, which Texas Chairman of the House Ways & Means Committee Kevin Brady suggests will be part and parcel with new tax laws. Tennessee Senator Bob Corker doesn’t necessarily see it this way, and says tax reform may prove more difficult even than the star-crossed healthcare reform legislation has been so far.
Tax reform on this scale has not even been attempted since Ronald Reagan was President, more than 30 years ago. A couple windfall tax breaks under the George W. Bush administration notwithstanding, restructuring the entire policy requires some heavy lifting. There are signs suggesting the Trump administration has not yet proven itself up to the task; Reagan’s team spent 10 months and wrote up nearly 1000 pages of documents before pushing tax reform policy through Congress.
Today, President Trump plans to hold a CEO summit to discuss a possible tax deal, and we may presume those guests invited — including executives from Citigroup (C - Free Report) , Blackstone (BX - Free Report) , General Electric (GE - Free Report) and Vornado (VNO - Free Report) , among others — might be asked whether pushing new reforms seems viable at some point this year. Many analysts are currently throwing shade on this idea, and think 2018 is the earliest possible time we might see some real progress on this initiative, but perhaps a meeting of the minds today will provide some sort of useful breakthrough, both for the Trump administration as well as the U.S. economy overall.
Mark Vickery
Senior Editor
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