The Perkins Field Guide to Tax Reform

Where’s the comprehensive tax reform we’ve been hearing about for the past few years? 2010’s Simpson-Bowles plan, although it had fairly widespread bi-partisan support, resulted in no actual legislation; Republican Dave Camp released a widely-cited road map in early 2014, which has not been taken up in any meaningful way; Oregon’s own Senator Wyden, now the highest-ranking Democrat on the Senate Finance Committee, has been putting forward variations on a bi-partisan tax reform plan since 2010; in January 2015, President Obama put forward the White House’s template for tax reform.

Since January, five Senate Finance Committee working groups have been seeking input and developing proposals for potential tax overhaul legislation; however, they just received an extension of time to report back, so we’ll be waiting at least another month to see what they came up with. Meanwhile expect to start seeing the tax policy statements of presidential candidates: Marco Rubio (R, Florida), has already released his in the form of proposed legislation, which has been both praised and criticized by conservatives. Other Republican candidates such as Ted Cruz and Rand Paul are reported to favor a flat tax—we anticipate we’ll be hearing more about that in short order.

With presidential campaigns already underway, passing meaningful tax reform before the 2016 elections seems highly unlikely. A recent CFO Journal article summarizes the challenges, which include new committee leadership, whether the proposal should be revenue-neutral, whether it should address individual or only corporate taxes, and how to handle increasingly significant international tax issues.

Even though we’re unlikely to get tax reform now, we will definitely be exposed to plenty of conversations about it and, as can often be the case during an election season, the information we receive can quickly become confusing and overwhelming. We thought this might be a good time to provide a few resources to aid you in sifting through the news coverage and candidate statements.

Here are some places to learn more:

And if you really want to wonk out, go to the source. Most articles about tax policy cite studies from one of three places, so why not find out more about their stances and available resources directly?

We hope these resources help satisfy your curiosity about potential tax reform, and prepare you for the election season to come. If your concerns run along more practical lines, don’t hesitate to contact your Perkins & Co tax advisor for information about how potential tax reform might affect you.

This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.