The 2017 tax reform legislation ushered in sweeping tax code changes for corporations, small business clients and individuals. Despite this, the tax changes that apply to individual taxpayers and pass-through entities are largely temporary, and are set to expire after 2025 unless Congress takes action to extend them.
A new bill has been introduced in Congress proposing that these tax code changes be made permanent now, while the Republicans still have control over the executive branch and the Senate. The results of the midterm elections left the Democrats in control of the House, meaning that this legislation will be more difficult to pass.
We asked Professors Robert Bloink and William Byrnes, who are affiliated with ALM’s Tax Facts, and hold opposing political viewpoints, to share their opinions on the odds that the new legislation will be passed to make the 2017 tax reform legislation changes permanent, and how the bill’s passage could potentially impact both individual and small business clients.
Below is a summary of the debate that ensued between the two professors.
Byrnes: We need to make 2017’s tax code changes permanent for all taxpayers. The corporate changes and many changes benefiting the wealthy were made permanent from the get-go—I don’t see any reason to maintain the temporary nature of the individual and pass-through tax breaks.
Bloink: It’s way too soon to be talking about making these tax code changes permanent. The 2017 tax reform legislation was passed less than a year ago, and we have no idea what the long-term impact of these tax code changes will be.
Byrnes: I think we’ve already seen the positive impact of tax reform at all levels of society—job growth is strong, people are earning more and businesses are incentivized to expand and invest. A healthy economy is good for everyone, and by keeping the individual and small business tax breaks temporary, we’re really punishing the ordinary American worker and small business owners—the exact people we want to help.