A Tax Reform Law for Our New Normal

201801.24
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A Tax Reform Law for Our New Normal

Publisher’s Column

In The CPA Journal‘s December 1986 issue, authors Stanley Rier and Leonard Goodman summed up their analysis of how that year’s major tax reform bill would affect individuals this way: “It appears that under the banner of tax simplification, Congress has treated us to a head-spinning array of changes which will leave the individual taxpayer gasping for breath.”

Well, it’s January 2018, President Trump has just delivered on his own promise of tax reform, and we are, once again, gasping. Not because of the breathtaking number of changes this latest overhaul brings to our tax code, although there is a dizzying amount of them; no, these gasps accompany our shock and disbelief that, in less than two months, congressional Republicans could introduce and enact a major tax overhaul affecting every American, add approximately $1.5 trillion to the national debt over 10 years, and do so without a single congressional public hearing.

It would be naïve in this hyperpolarized political climate to expect the type of bipartisanship and compromise that led to the successful passage of the Tax Reform Act of 1986, which was an imperfect bill, but one that followed the protocols of a healthy and democratic legislative process. You can read more about that process and the role the NYSSCPA played in it on page 6, in an interview with Walter Primoff, the Society’s former director of professional programs and tax policy.

That process began with a series of preliminary Treasury Department hearings in 1984, at which the NYSSCPA’s executive director at that time, Robert Gray, testified. Treasury went through two draft proposals before President Reagan unveiled the second as his tax plan in May 1985. Then, Congress began its work. That summer, according to The New York Times, the House Ways and Means Committee heard testimony from more than 450 witnesses, and the Senate Finance Committee held 33 days of hearings. Much wrangling, negotiation, and compromise would take place over the following year; the result was a hard-won tax bill that was signed into law on October 22, 1986. “For years to come, students of politics will look to the odyssey of the new tax law as a prime example of how the American system of government gets things done,” wrote New York Times reporter David E. Rosenbaum the following day.

How do we get things done now? There were no hearings. There was no debate. For its part, the Treasury Department added insult to injury (or perhaps to our collective intelligence) by issuing a one-page “analysis” of the tax plan on December 17, two days before the Senate voted, 51-48, along party lines, for a 503-page tax bill few legislators—let alone members of the public—had had a chance to read, with amendments illegibly scrawled in the margins. And we were left gasping.

What’s Next?

Damage control.

The NYSSCPA has created a task force whose primary goal is addressing the potential economic fallout to New York as a result of this bill, with a focus on the capping of all state and local income, property, and sales tax (SALT) deductions at $10,000.

Education.

We have a full-day conference planned for January 31, featuring nationally renowned experts who will provide a first look at the impact the bill will have on multiple practice areas, including real estate, investments, trusts and estates, employee benefits, closely held and pass-through entities, and more. Some members of Congress may want to attend.

Joanne S. Barry, CAE. Publisher, The CPA Journal Executive Director & CEO, NYSSCPA.

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