I hope so! But, we will just have to wait and see. To reform the health care system is a difficult task in deed and we saw that the recent attempt failed. Many do not realize, but tax reform is even more difficult to reform than health care. I remember one of my college professors, a former Pricewaterhouse Coopers partner, taught us that one reason tax reform is so challenging is because the concept of revenue neutrality. Basically, if tax revenues are cut dramatically where is the Fed now going to earn revenue to pay bills. What he taught me, has remained true. There has been a big push for Fair Tax, but nothing really has happened.
The last time the US underwent serious tax reform was 1986.
On the other side of the coin, we can all agree, it is about damn time for tax reform. The tax code was approximately 26,000 pages in 1984 and has tripled to approximately 75,000 pages in 2017.
According to recent statements by National Economic Council Director, Gary Cohn, the proposed standard deduction could change from $12,600 to $24,000 per year for married filing jointly. Obviously, that is a huge increase and would significantly help a good majority of the population. Currently, only 30% of taxpayers itemize their deductions and this change would help the other 70% of taxpayers who do not itemize deductions. It is challenging for any faction to argue that this proposed tax change would hurt rather than help the middle class. The numbers/calculations are straightforward.
Who would not benefit from this tax reform change? Affluent individuals who live in states that have high state/local tax rates. The standard deduction proposal change includes a caveat that taxpayers will no longer be able to itemize their state/local taxes paid each year on schedule A.