[IMGCAP(1)]Among the issues that are keeping tax executives up at night are anti-inversion rules that don’t address the root cause: an anti-competitive U.S. tax system.

This concern was cited prior to the Treasury’s latest anti-inversion rules, which are having their desired effect, at least on the Pfizer-Allergan deal. It was part of the 10th Annual Miller & Chevalier/National Foreign Trade Council Tax Policy Forecast Survey.

Other concerns voiced by executives include: Congress will continue to focus on piecemeal legislation rather than build momentum toward tax reform that can occur in 2017 or 1018; global taxation of U.S. corporations and the urgent need to pivot to a territorial system; and continued instability of tax rules, which makes tax planning difficult at best.”

“I think it’s very much a confirmation of the kind of current environment we have in an election year,” said Miller & Chevalier member and Tax Department vice chair Marc Gerson, former majority tax counsel to the House Ways and Means Committee. “There’s a lot of interest in tax reform, with the two chairmen of the tax-writing committees holding hearings and working on specific proposals. It’s keeping tax more in the conversation this year than in past elections.”

In February, Ways and Means Chairman Kevin Brady, R-Texas, said fresh thinking is needed on how business income is taxed and on how to achieve a more competitive business tax rate, which he suggested may need to be 20 percent or lower.

“To that end, Chairman Brady intends to release an international tax reform proposal this year,” said Gerson. “And at some point in the next few months Senate Committee on Finance Chairman Orrin Hatch plans to present a corporate integration plan to eliminate the double taxation of corporate income.”

Tax executives believe the presidential and congressional elections will lead to substantive discussion of comprehensive tax reform. However, despite the increasing rhetoric, none of them believe tax reform will happen in 2016, according to Gerson. An overwhelming number—82 percent—believe there will be no tax legislation at all this year.

“There’s the realization that because this is an election year it will be difficult if not impossible for any tax legislation, certainly on tax reform, to move this year,” he said.

The enactment of revenue-raising provisions without offsetting tax rate reductions and the high statutory tax rate are the top two business tax concerns of tax executives in 2016.

The tax executives surveyed believe Congress will again extend the temporary tax provisions that were not made permanent by the PATH Act at the end of last year. But a majority (55 percent) believe that Congress will do this when or after the provisions expire, requiring them to be extended on a retroactive basis.

Most believe that Senator Bernie Sanders, D-Vt., would have the least favorable tax policy for business income, followed by former Secretary of State Hillary Clinton, whom 51 percent cite as the most likely victor in this year’s presidential election.

“The hearings and proposals that Brady and Hatch are working on might form the foundation for future tax reform,” said Gerson. “If you consider the increased discussion of reform by the presidential candidates, there is the notion that 2017 will be a window of opportunity for significant tax reform legislation, depending on who the president is.”

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