US Capitol Building and National Mall View


With the August Recess upon us in the United States Congress, it is a good time to sit back in our chairs and survey the landscape.

Among many other developments, the first six months of the Trump Presidency have seen the following:

  • A one-page slide on tax reform was disseminated by the Trump administration in late April, calling for significant cuts to corporate tax rates, individual tax rates, and a repeal of the estate tax.
  • The “Big Six” [House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX)] released a joint statement in late July, taking the border-adjustment tax off the table, and placing emphasis on corporate tax cuts and helping the working/middle class.  A key part of the statement was as follows:
    • “We have always been in agreement that tax relief for American families should be at the heart of our plan. We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones. The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas…”
  • A failed attempt at healthcare reform in late July, showing that the Republican Party is somewhat splintered and getting 50 votes is easier said than done.
  • House Speaker Ryan recently claimed that the Republicans are far more united on tax reform than healthcare, and fully expects to see tax reform through the budget reconciliation process this fall.
  • We are in the midst of a regulatory freeze.  The White House’s Office of Management and Budget stated in July that it would discard hundreds of existing or planned regulations as part of its larger push to be more business friendly.  The Trump administration said it was completely withdrawing 469 proposed regulations, and setting aside or reevaluating an additional 391.
  • The proposed 2704 regulations are one of eight sets of significant tax regulations listed for review and assessment as potentially overly burdensome on taxpayers.  A notice issued from Treasury in early July suggests that Treasury will propose reforms to all of these regulations, spanning from modifying proposed rules to full repeal/withdrawal.  None of this comes as a surprise, and it now appears highly likely that the currently proposed 2704 regulations will not be implemented in their current form, if at all.

In the last several months, we have gained some clarity on the future (or lack thereof) of the proposed 2704 regulations.  On the other hand, tax reform has not advanced very far.  If anything, it appears that the list of objectives and the extent of tax cuts is being reigned in to increase the odds of passage.  Still, time will tell, and MPI will continue watching for any developments as the wild ride continues.

DISCLAIMERS:  The information provided herein has been prepared without taking into account any specific objectives, financial circumstances or needs.  Accordingly, MPI disclaims any and all guarantees, undertakings and warranties, expressed or implied, and shall not be liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or actual, incidental, consequential or any other loss or damage) arising out of or in connection with any use or reliance upon the information or advice contained within this publication.  The viewer must accept sole responsibility associated with the use of the material in this publication, irrespective of the purpose for which such use or results are applied. This material should not be viewed as advice or recommendations.  This information is not intended to, and should not, form a primary basis for any investment, valuation or other decisions.  MPI is not acting as a fiduciary, an expert or advisor in any capacity whatsoever in providing the information set forth herein.  The information set forth herein may not be relied upon and is not a substitute for competent legal and financial advice.

The information provided in this publication is based in part on public information.  MPI makes every effort to use reliable and comprehensive information, but makes no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the information provided herein and MPI shall not have liability for any damages of any kind relating to any reliance on such data.  Further, the information set forth herein may be subject to change.  MPI has no obligation to update the information set forth herein or to advise the viewer when opinions or information may change.

Investment banking and transaction advisory services are provided by MPI Securities, Inc., member FINRA/SIPC.  Persons affiliated with MPI Securities, Inc. are registered representatives of and securities are offered through MPI Securities, Inc.  This publication is not a solicitation or offer to buy or sell securities.  The information contained in this publication was prepared for information purposes only and was not intended or written to be used as investment or tax advice or as a recommendation to buy or sell securities. 

About MPI

MPI, a prestigious national consulting firm founded in 1939, specializes in business valuation, forensic accounting, litigation support and corporate advisory work. MPI provides fairness opinions, sell-side and buy-side advisory services through its investment banking affiliate MPI Securities, Inc. MPI conducts every project as if it is going to face the highest level of scrutiny, and its senior professionals have extensive experience presenting and defending work product in front of financial statement auditors, management teams, corporate boards and fiduciaries, the IRS, other government agencies, and in various courts.