EDITOR’S NOTE -

We held up Tax Talk this quarter in order to bring you the latest on the Trump administration’s tax reform plans. Unfortunately, the one-page plan and transcript of the press conference released on April 26 discussed below, represent a step backward for the Trump administration’s thinking on tax reform. Our article points out that it is missing even the level of detail in the President’s campaign plan. According to the administration, May will be a month of listening to various constituencies about tax reform. However, it appears to us that, given the magnitude of the issues May may not be enough time to fully consider and develop a plan. While tax technicians such as yours truly are waiting for legislative language and explanations of various provisions, it is unclear at what point we will see those released. In fact, if the American Health Care Act of 2017 is any guide, it won’t be until shortly before it is ready to be voted on in the House...

In the meantime there is no shortage of discussion about various provisions thought to be in the tax reform plan. For example, in Q1 there have been a number of serious panel discussions about the destination-based cash flow tax (see article below). There is no consensus but instead what has developed is a schism between U.S. importers (who would be hurt by the tax) and U.S. exporters (who would benefit from the tax). These positions are reflected in dueling letters to Congress from groups called Americans for Affordable Products and the American Made Coalition. Unfortunately, this doesn’t bode well for a consensus on this important part of the House’s original plan.