After last month’s failure by the White House and Congress to repeal or replace the Affordable Care Act, Republican lawmakers have turned their eyes to tax reform, another main plank in President Trump’s campaign platform.
With the health care loss, Republicans will feel more pressure to score at least a partial win when it comes to tax reform, said Professor Kelly Wentland, who teaches accounting and taxation at George Mason University’s School of Business.
“This may mean identifying components of current tax proposals with broader support—or at least less vocal opposition,” Wentland said.
A concern with tax reform decided this way, she said, is that it often excludes consideration for indirect effects of the policy change, as well as the broader consequences for the tax system as a whole.
“For instance, if, hypothetically, the GOP garners support for individual tax rate changes alone, this single area of change could spill over to taxation of ‘flow-through income’ from individuals who are either sole proprietors or are partnership owners,” Wentland said. “This could have dramatic consequences for how businesses are formed and the dynamic between businesses organized as partnerships instead of corporations.”
For Mason Distinguished Professor of Accounting Richard Larsen, the question is how fast the White House and Congress can get tax reform done.
“I think they need to do it relatively soon,” he said. “No one wants to be going into a tax [issue] in an election year, so I think they’d like to do it sooner than later. But I don’t think the House or the Senate will move forward on it unless Trump gives it the protection [it needs] and says we need this for U.S. jobs, we need this for U.S. manufacturing in the country.”
Kelly Wentland can be reached at 703-993-5476 or kwentlan@gmu.edu.
Richard Larsen can be reached at 703-628-1059 or rlarsen@gmu.edu.
For more information, contact Buzz McClain at 703-727-0230 or bmcclai2@gmu.edu.
About George Mason
George Mason University is Virginia’s largest public research university. Located near Washington, D.C., Mason enrolls 35,000 students from 130 countries and all 50 states. Mason has grown rapidly over the past half-century and is recognized for its innovation and entrepreneurship, remarkable diversity and commitment to accessibility.