Republican Majority May Mean Tax Reduction
With the election behind us and the Republican Party now controlling both the House of Representatives and the Senate, tax reform is squarely on the agenda. Republicans have long proposed that a major overhaul of the entire tax code is needed. Whether or not it will happen is up for debate but the current political climate favors is more than any time in the last decade.
The House Ways & Means Committee will likely be led by Representative Paul Ryan, Republican from Wisconsin and the Senate Finance Committee will now be led by Senator Orrin Hatch, Republican from Utah. But add to it that the outgoing Democratic chairs of these committees were also in support of tax reform – there may actually be some positive momentum in Congress. And all involved have been favorable to simplifying the code and reducing tax rates.
The key (and possibly the sticking point) will be the Administration and the Department of the Treasury (part of the Administration). President Obama has indicated that he will work with the Republican Congress, but only to certain “limits” and suggests that anything the Republicans attempt will need to be brokered with the White House as well.
So in the end, it’s still a toss-up whether or not we’ll see real tax reform. But it’s far more likely now than ever before that something positive will actually be accomplished.