As tax reform efforts resume in Washington this month, a new survey finds that over 70 percent of business tax professionals believe a detailed tax reform plan will begin to be worked on by the House Ways and Means Committee this year, and nearly 50 percent of the respondents think a tax reform plan will be put forward in the Senate.
The survey comes from Ernst & Young and the Tax Council, a membership association of Fortune 500 companies, accounting and law firms, and trade associations. The monthly TTC/EY Tax Reform Business Barometer measures the expected likelihood of reform at each stage of the federal government process, finding high expectations of forward movement of the initial stages of tax reform in 2013.
The inaugural edition of the survey also found that 43 percent of the business tax professionals and practitioners who responded said they expect the House Ways and Means Committee to pass tax reform legislation by the end of this year. About one out of five of the respondents anticipate the Senate Finance Committee to do so as well. Twenty-seven percent of the respondents said they think that federal tax reform will be enacted by the end of 2014.
Sixty-one percent of the respondents ranked the issue of revenue neutrality vs. revenue-raising as the biggest hurdle to federal tax reform, followed by reluctance to reduce major individual tax expenditures.
EY and the Tax Council plan to conduct further surveys for the Tax Reform Business Barometer as the tax reform debate heats up in Congress.
“During the development of the 1986 Tax Reform Act, there were many highs and lows on the prospects of tax reform actually succeeding,” said Tom Neubig, director of quantitative economics and statistics at Ernst & Young, in a statement. “The barometer provides a real-time assessment of the business community’s expectations. Tax reform will be a multi-year process, but key decisions are expected to be made in the early deliberations, and significant progress is expected this year, so companies should be engaged.”
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