Coveted tax breaks, including state, local and mortgage interest deductions as well as charitable contributions, may all be on the table when Congress starts debating tax reform. But don't hold your breath waiting for change, author and tax reform expert Bruce Bartlett told financial advisors at NAPFA's fall conference in Philadelphia.
"I think there's zero chance of tax reform happening before the next presidential election," Bartlett said during his keynote address to the conference. In addition to the bitter partisan divide in Congress paralyzing legislation, the Obama administration has "very little interest" in tax reform, Bartlett pointed out.
What's more, he noted, the heads of tax committees in both the House and the Senate are about to lose their positions as committee heads due to term limits next year. That's significant because the powerful politicians hoping to replace them, Paul Ryan in the House and Ron Wyden in the Senate, have made tax reform a key issue and are in no hurry to see legislation authored by others, Bartlett asserted.
Nonetheless, there is a general consensus in Washington that tax reform is needed, especially the reduction of corporate tax rates, Bartlett said. The hard part is how to do that in a way that's revenue neutral, he added. As a result, "tax reform is on hold for the time being," according to Bartlett.