In today’s political environment, the idea of simplifying our nation’s tax code has become a stated goal of both Republicans and Democrats. Despite some differences between the parties, in general a consensus has developed that lower tax rates, particularly for corporations that have to compete internationally, and a broadening of the tax base by eliminating specific industry preferences would lead to greater economic growth and an increase in jobs.
- Tax reform is extremely difficult to enact in the US.
- The tax reform policies put forth by the current administration would put undue stress on US importers while still favoring exporters.
- Without the proposed reform the government will need to come up with new funding strategies to lower taxes and lead to greater challenges in tax reform.
“Eliminating tax preferences for certain economic activity may sound fine in theory, but oftentimes it can cause untold economic disruption to businesses that have made investment decisions based on existing tax law”
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