Ernst & Young has released the results of its latest survey with the Tax Council of tax executives and tax practitioners about their predictions for tax reform.
Sixty-one percent of survey respondents indicated they continue to believe that tax reform will occur by 2018, with 2017 considered to be the most likely year for tax reform. The survey, known as the Tax Reform Business Barometer, is conducted by the nonprofit Tax Council and EY’s Quantitative Economics and Statistics practice.
Approximately 45 percent of the respondents think reform will be comprehensive. While 23 percent think it will include all businesses including both C corporations and pass-through businesses, 17 percent predict it will affect only C corporations, and 13 percent believe it will be international-only.
Respondents were also asked about their expectations regarding the likelihood of the House of Representatives taking specific actions toward tax reform. Half of respondents believe there is at least a 50 percent probability that the House Ways and Means Committee Chairman will release a specific tax reform plan by the end of 2016.
In addition, half of the business tax professionals polled believe it is at most 20 percent and 10 percent likely that the House Ways and Means Committee will mark up and report out of Committee tax reform legislation this year. Half of respondents think it is at most 5 percent likely that the House will pass tax reform legislation this year.
Respondents thought it less likely (25 percent median likelihood) that the Senate Finance Committee chairman will release a specific tax reform plan by the end of 2016. Half of respondents thought the probability was less than 25 percent and half didn't believe there was any chance the Senate will pass tax reform legislation by the end of 2016.
Half of respondents believe there is at most a 10 percent probability that the Senate Finance Committee chairman will release a discussion draft or proposal to integrate the individual and corporate income taxes to address the double tax on corporate earnings within the first quarter of 2016. In addition, 74 percent of respondents think it is very or somewhat likely that the integration discussion draft or proposal will change the tax treatment of interest.
Fifty-six percent of respondents think the Protecting Americans from Tax Hikes (PATH) Act makes U.S. tax reform more likely, while 12 percent believe the law makes tax reform less likely and 32 percent think it has no impact.
Forty-three percent of the survey respondents think that the Organization of Economic Cooperation and Development’s Base Erosion and Profit-Shifting project, also known as OECD BEPS, will result in greater similarity of how countries tax the income of global companies, while 28 percent believe harmonization will decrease.