If you or your clients are waiting for meaningful tax reform measures to be signed into law this year, don\u2019t hold your breath. The prospects are, in a word, dim. This isn\u2019t 1986, when President Reagan and House Speaker Tip O\u2019Neill got together to overhaul the tax system.<\/p>\n
The chasm that divides the political sides is much greater than it was nearly 30 years ago, and The Washington Post<\/em> says that\u2019s one of the reasons why passing meaningful reform this year will be difficult \u2014 if not impossible. Next year might hold a better promise of reform, but the issues that make it unlikely today will have to be dealt with before it can happen. (http:\/\/tinyurl.com\/lby3cgg<\/a>)<\/p>\n Three problems <\/strong><\/p>\n Foremost among the sticking points is how the next tax codes will divide the money. Republicans, for the most part, want a new tax structure to remain revenue neutral, The Post<\/em> reports, as was agreed upon in the 1980s. Neutral, in tax code political terms, means lowering the corporate tax rate and closing loopholes instead of generating money that could be used to plug holes in federal budget, support infrastructure or pay down the debt.<\/p>\n The process is also part of the problem. Sen. Max Baucus (D-Mont.) and Rep. David Camp (R-Mich.), two reform champions, haven\u2019t put together a full-blow bill, which the framers of the 1986 law did. Instead, Baucus and Camp have gone with a so-called \u201cblank slate\u201d approach in which special interests must justify their inclusion in a new bill. With so many competing interests to be weighed against each other, a political stalemate is nearly inevitable.<\/p>\n Keeping corporate income tax within U.S. borders \u2014 and taxing it \u2014 is another thorny issue. With the growth in multinational companies and the global economy in the past 30 years, billions of tax dollars from U.S. companies are never collected. Republicans have pushed for a \u201cterritorial tax,\u201d and President Obama has shown some openness to it, The Post reports, but creating one that doesn\u2019t lose the treasury a lot of revenue will be difficult.<\/p>\n Other issues <\/strong><\/p>\n Political races, specifically Senate elections in 2014, call into question how much meaningful tax reform can happen anyway, The Christian Science Monitor<\/em> says. (http:\/\/tinyurl.com\/k83xj9d<\/a>) Sen. Mitch McConnell (RKy.) is facing a tea party candidate for the GOP nomination. There\u2019s also a credible Democrat who could pose a problem in the November 2014 election, something McConnell hasn\u2019t seen since first elected in 1984.<\/p>\n If a tax reform bill were to pass, McConnell would have to defend his vote, and no matter what the vote was, opponents would use it against him. That\u2019s just politics.<\/p>\n The Post<\/em> says public opinion is partly to blame. Only 50 percent of Americans are unhappy with income tax rates, making the status quo easier for politicians to maintain. In the 1980s, more than 60 percent of the public was unhappy, and politicians \u2014 fearful of an angry electorate come voting time \u2014 made sure a bill was passed.<\/p>\n Current administration idle<\/strong><\/p>\n Finally, President Obama hasn\u2019t tied himself to tax reform the way Reagan did. While Reagan toured the country, giving speeches with soaring rhetoric to drum up support, Obama has yet to put the full weight of the presidency into getting a deal done, The Post<\/em> reports.<\/p>\n Without a significant push from Obama to keep any deal moving forward or jump-start it when it looks dead, tax reform in 2013 is more theory than reality.<\/p>\n We hope this information was useful to you and helps your clients and their families. If you have a specific case or a question, don\u2019t hesitate to call our office.<\/a><\/p>\n Click here<\/a> for PDF version of article.<\/p>\n","protected":false},"excerpt":{"rendered":" If you or your clients are waiting for meaningful tax reform measures to be signed into law this year, don\u2019t hold your breath. The prospects are, in a word, dim. This isn\u2019t 1986, when President Reagan and House Speaker Tip O\u2019Neill got together to overhaul the tax system. The chasm that divides the political sides… Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[120,186],"tags":[],"class_list":["post-203","post","type-post","status-publish","format-standard","hentry","category-tax-planning","category-tax-reform"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/posts\/203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/comments?post=203"}],"version-history":[{"count":1,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/posts\/203\/revisions"}],"predecessor-version":[{"id":599,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/posts\/203\/revisions\/599"}],"wp:attachment":[{"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/media?parent=203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/categories?post=203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caassetprotection.com\/blog\/wp-json\/wp\/v2\/tags?post=203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}