This update was prepared by a tax partner with our affiliate, Wipfli LLP. With more than 1,800 associates, 41 offices in the United States and two offices in India, Wipfli ranks among the top accounting and business consulting firms in the nation.
When President Trump took office in January, his broad and ambitious agenda included (among other things) significant tax reform for businesses and individuals. We discussed some of the parameters of Trump’s tax reform proposals on February 1, shortly after his inauguration — click here to see that discussion. Unfortunately, to this point, an old saying can sum up how far tax reform has actually progressed in Congress:
“When all is said and done, more is said than done.”
Congress was unable to craft — let alone pass — any tax reform legislation prior to its August recess. Tax reform largely took a backseat to the many summer debates and votes related to healthcare.
Now that Congress has returned from recess, there’s no doubt that tax reform will remain on the agenda. However, that agenda has become more crowded due to the status of the national debt ceiling; a possible government shutdown over spending related to a border wall; emergency aid for people and areas impacted by Hurricane Harvey; and the ongoing debate over healthcare. Exactly where tax reform sits on the upcoming agenda is difficult to predict, especially given some of the apparent infighting between Congressional Republicans and the President.
Prior to the August recess, though, the White House released a joint statement on tax reform, which was joined by several prominent Republicans, including Speaker of the House Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Chairman of the Senate Finance Committee Orrin Hatch (R-UT) and House Ways and Means Committee Chairman Kevin Brady (R-TX). The statement clearly indicated the importance of tax reform to the authors; in fact, the statement called tax reform “the single most important action we can take to grow our economy and help the middle class.”1
Although the statement clearly indicated the strong preference to pass tax reform, it provided very few details as to what that tax reform would actually look like. The only specific item cited in the statement was the exclusion of a border adjustability tax from any tax reform proposals to come this fall. The statement otherwise included only broad guidelines that tax reform should support, including:
– Reducing tax rates “as much as possible.”2
– Allowing “unprecedented capital.”3
– Placing a priority on permanence.
– Encouraging American companies to bring back jobs and profits trapped overseas.
Unfortunately, this statement was released prior to the August recess. Events since then (e.g., Hurricane Harvey, civil unrest in parts of the country, Republican infighting, etc.) have only increased and clouded the agenda for Congress to tackle prior to elections in November. Tax practitioners are still hopeful that tax reform legislation will be crafted, passed and signed into law; however, when that actually happens is far from certain.
Wipfli’s tax professionals will continue to monitor developments and communicate information as soon as it becomes available, including any planning opportunities that develop. Visit Wipfli.com or tune into OneBite to stay up-to-speed.