US Divisions Grow Following Midterms
It’s the start of a new working year, and in the field of taxation it’s very much business as usual. In the United States, taxpayers and their advisers are no doubt still busy poring over the details of reams of proposed new tax regulations which have been issued in recent weeks. And looking ahead, they will also need to get to grips with a new package of technical corrections to the TJCA, as well as to existing tax law.
As has become almost customary, the political climate in Washington is unlikely to help matters, though. We now have a split Congress and a Democrat-controlled House of Representatives that is likely to oppose President Donald Trump at every turn, just as the Republican Congress did in the final years of President Obama’s premiership. A hint of the bipartisan politics to come was provided by the handover of the House Ways and Means Committee chairmanship from previous steward Kevin Brady (R-TX) to new incumbent Richard Neal (D-MA). The release of the draft technical corrections bill on January 2 was likely to have been Brady’s last act as committee chair. Look at the Ways and Means website now and it’s as if the Texas republican never existed. It’s not promising to be a harmonious 116th Congress.
Consensus is unlikely to break out any time soon over critical multilateral tax issues either, especially with regards the thorny issue of tax rules for digital business models. Barring an unlikely change of position on the matter by the US Government, Washington will continue to insist that any new rules be negotiated through the forum of the OECD, and not implemented unilaterally.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look