At some point in time, probably not too far away, the Democrats will regain control of the federal government. What will happen to the Trump tax bill at that point?
As with the Bush tax cuts, total repeal is not a realistic option. Here is my prediction:
- The rate reductions for individuals will be made permanent, with the exception of the top bracket, which will return to about 40 percent;
- Corporate taxes will be increased to about 25 percent;
- The limitations on the SALT deduction will be removed;
- There will be serious discussion of a tax on fossil fuels, but it will fail as the result of opposition from red state Democrats;
- The increased standard deduction will remain in place;
- The pass-through provisions of the bill will be repealed; and
- The treatment of foreign income will be changed to create serious disincentives for corporations to move abroad.
If I were a corporate executive, I would be making my long-term plans based on these assumptions, not the current state of the law.