There is great opportunity for the US economy to improve its traditional legacy tax structure, which is why President Trump has decided to make tax reform one of his key campaign goals, but the intransigent difficulty has been how the country will pay for it.
According to a Deloitte Tax LLP survey released earlier this month, only a small number of finance US tax, and business professionals expect President Donald Trump’s 15 percent corporate tax rate to come into play as part of this year’s tax reform.
Over 3,000 people engaged in a poll that offered a glimpse of private-sector expectations about tax reform that are less optimistic than public statements from Trump administration officials and lawmakers.
Trump and his fellow Republicans are striving to get the corporate income tax rate down from 35 percent to 15-20 percent. The implementation of this would drive US economic growth and competitiveness in the years to come.
Just under half of the poll’s participants viewed a lower corporate rate as being the primary financial driver of tax reform, however due to the political and budgetary challenges facing tax reform, nearly 40 percent predicted the rate would end up at 25 percent.
31 percent of those were involved in a survey, all of whom were representatives of a professional services firm during a July 18 Deloitte webcast expected a corporate tax rate of 20 percent. With less than 5.5 percent believing Trump’s 15 percent tax rate would become a national law.
Still, about 74 percent of those surveyed were doubtful or not at all confident that a comprehensive tax reform bill would be enacted in 2017. Less than 19 percent were confident or somewhat confident that it would happen this year.
More than 63 percent believed compromise to be the necessary ingredient for Congress to succeed at tax reform, a quality that has proved elusive for Republican lawmakers so far this year.
Trump’s public support, leadership and sense of economic crisis were seen as essential by less than 10 percent of participants respectively.
In terms of growth, about 16 percent identified tax code simplification as the feature most likely to boost the economy.
International tax reform and accelerated expensing of manufacturing equipment each drew support in the single digits.
Republicans have pledged to enact the most sweeping tax overhaul since the Reagan era before year-end. An ambitious White House timeline calls for legislation to be unveiled in September and voted on in the House of Representatives and Senate before the end of November.
The decrease in corporate tax percentages has already been introduced globally with the UK’s reduced to 17 percent, Canada’s down to 15 percent, and Ireland’s at 12.5 percent. These reductions in corporate tax have been implemented with an aim to benefit economic growth.