Now that the “Big Six” have announced that they will release an agreed-upon tax reform plan the week of September 25, the question becomes: Can they actually get it done? Is there enough time, motivation and a clear path forward to get permanent tax reform done in 2017? The answer is yes, it could happen. Politics will be the driving force, and the budget reconciliation process will provide the opportunity.
Congress has been working diligently on comprehensive tax reform proposals to be passed through the budget reconciliation process following passage of the 2018 budget resolution. Lowering the corporate and individual tax rates will require offsets like repealing certain tax credits available to corporations. What is unclear is whether repeal of some tax credits might be retroactive in effect, which would raise arguments of unfairness for companies that have detrimentally relied on current law.