Todd B. Reinstein, a tax partner with Pepper Hamilton, was quoted in the May 31, 2017 International Tax Review article, "U.S. Budget Targets a Simple Tax Code, But Will It Work?"
"One of the reasons they want to eliminate the breaks is because there are a lot of breaks in the tax code," said Todd Reinstein, tax partner at Pepper Hamilton. "It has become very complicated. The tax code and the regulations on an enforcement of a special break is expensive and time consuming."
Although the tax reform brings many positives, Reinstein noted that there will be winners and losers and this is going to be vital for the American economy. For example, businesses that do not utilise tax breaks and already pay a higher effective tax rate will see their tax bills fall after the widespread tax plans are implemented.
However, there are concerns that some companies may pay higher taxes after the tax breaks are repealed and corporate tax rates are lowered. "If you eliminate that credit, some businesses will be paying more tax in the U.S. even if they lower the rate because the credit is so valuable to them to reduce the tax liability," Reinstein said. "There are a number industries, such as the entertainment industries, which have a lot of tax breaks. When you eliminate the tax breaks and reduce the tax rate it makes that business uncompetitive in the U.S. and businesses will be upset."