Significant US Tax Policy Changes Expected
Whether you believe the White House’s claim that the tax policies of the President Barack Obama administration ”saved” the US economy or not depends on which side of the political fence you stand. It would be harder, however, to argue in favor of any assertion that the tax code improved under the Obama’s leadership. It is difficult to measure or quantify such things in a simple way, but I’m willing to bet that the majority of taxpayers would say that, at best, the US tax code is just a complex now as when President Obama was sworn in eight years ago. Most would probably reply that the situation has deteriorated.
One of the reasons why the code was left to fester under Obama was that he was, for the most part, at odds with Congress on the matter. But Treasury Secretary Jack Lew hinted recently that comprehensive tax reform would have been difficult anyway, because of the lack of fiscal space, and because difficult political choices would have had to have been made. Indeed, he appears to suggest that the administration chose to take a pragmatic course with regards to taxation, rather than a bold or idealistic one.
All that looks like it is about to change, however, if the results of a recent survey of chief financial officers is to be believed. Deloitte’s quarterly CFO survey shows that the majority of respondents expect significant tax policy changes after Obama hands over to Trump later this month, with two-thirds anticipating a substantial corporate tax rate cut. This contrasts sharply with the results of other surveys of this type conducted before the election, which in some cases revealed deep pessimism about the prospect of corporate tax reform among business leaders. So, I suppose the moral of the story is, after a turbulent 2016, traditionally unthinkable political and legislative changes cannot be ruled out.
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