20th November 2017
And now the tax battle is afoot… As you all know, on November 2nd, the House Ways and Means Committee released their tax bill. Chairman Brady’s markup soon followed and seven days later, the Senate Finance Committee released their bill and Chairman Hatch began his markup.
And on the 7th day, the tax reformers … rested… MSI's Pennsylvania accounting member Holsinger P.C. provides an update.
For those into the details please see the attached power point (from our Holsinger CPE Day – right after the House bill came out on 11/2t) which gives a 20 page summary of the House bill. The news is that the Senate bill (released a week later) largely mirrored the House bill. And both bills are politically… challenging (a.k.a. impossible).
The take away is this. The “Tax Reform” as proposed by both Senate and House bills lowers the corporate tax rate from the highest in the industrialized world to 20%, which is slightly below our major European countries / “competitors”. Further it does not tax offshore dividend repatriation. It is notable that unlike our European friends, the US has no Value Added Tax (VAT) system (a tax which has no votes in Congress… yet). Therefore:
Because you can’t have corporate “reform” paid for by the lowest earning Americans, the lower end of the tax scale gets simplification and tax relief. The middle pays about the same. Doctors, lawyer and accountants pay more (do I hear some cheering?)…. Republicans (to survive the mid-term elections) must successfully sell that the tax reform bill will actually produce jobs and an increase in wages. That is an economic debate which is over my pay grade.
For those into the politics of how the attached power point (tax reform) can happen, please keep reading. … Those not interested…. We will brief you after the 27th out of the baseball game.
Read the full article by MSI’s member firm Holsinger P.C. here
Holsinger, ranked the 15th largest accounting firm in Pittsburgh, provides comprehensive accounting, audit, tax and management consulting services to small and medium-sized businesses and individuals. The firm has more than 30 years of experience.
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