Business tax reform and trends: survey views
Views on the prospects for federal tax reform
Respondents say US President Donald Trump’s election has increased tax reform prospects
The Tax Council (TTC)/Ernst & Young LLP Tax Reform Business Barometer (the Barometer)1 assesses business tax professionals’ views on the outlook for, and key aspects of, federal tax reform. The Barometer tracks the views of business tax professionals as the US Congress debates and considers reform of the US tax system.
In addition to questions on tax reform, the January 2017 Barometer also included questions on:
- The impact of the presidential election on tax reform
- The House Republican Blueprint for Tax Reform
- Integration of individual and corporate income taxes
- Possible funding of infrastructure spending legislation
Prospects for federal tax reform
- Eighty-three percent of those surveyed believe tax reform is likely to occur in 2017 or 2018 (with 48% of all survey respondents believing 2017 is the most likely year).
- Half of respondents gave passage of tax reform legislation a 75% chance in the House and a 50% chance in the Senate.
- Half of respondents gave release of tax reform legislation by the House Ways and Means Committee Chairman a 95% chance, and an 80% chance for approval by the Committee.
- Half of respondents gave release of legislation by the Senate Finance Committee Chairman a 60% chance, and a 51% chance for approval by the Committee.
- Approximately 73% of respondents now think reform will be comprehensive, as compared to 45% of respondents from the January 2016 Barometer. About 17% think tax reform will only cover business taxes (i.e., will include both C-corporations and pass-through businesses), 9% think it will affect only C-corporations, and 1% think it will be international-only reform.
Impact of the presidential election
- All surveyed believe the election of Donald Trump as President has increased the prospects for US tax reform — 67% believe it makes tax reform significantly more likely and 33% believe it makes tax reform more likely.
House Republican Blueprint for Tax Reform (the Blueprint)
- House Republicans are working on statutory language for the Blueprint. Respondents place a greater likelihood for statutory language being released in the first half of this year, than later in the year. The median respondent gave the likelihood of statutory language being released in either March/April 2017 or May /June 2017 a 30% likelihood, but only a 20% likelihood of being released in July through December 2017.
- Fifty-four percent of respondents think there is a more than 50% chance border adjustments will be retained in final legislation, while 46% believe there is a less than 50% chance they will be retained.
Integration proposal from the Senate Finance Committee
- Those surveyed generally see a diminishing chance for the Senate to release a proposal to integrate individual and corporate income taxes.
- Half of respondents gave a 50% chance that the Chairman of the Senate Finance Committee would release an integration proposal.
Read the full report.
1 The TTC/EY Tax Reform Business Barometer defines tax reform as legislation that substantially broadens the tax base or changes the tax rate for either corporate or individual taxpayers.