America Competes Act could bring tax changes

America Competes Act is not intended as tax reform legislation. Yet some tax advisers are talking about the impact it could have on individuals and businesses.

First, we should consider that the probability of this proposal becoming law is high. This status is far different from the many rumors and massive amount of tax reform misinformation over the past year covered in another blog post “Tax changes are not real“. The America Competes bill already passed the House in February and passed the Senate yesterday. The Administration says the President will sign it. There is, however, a significant reconcilliation required between the House and Senate version. That reconcilliation is not expected to be completed before mid-May.

Second, we should look at the included tax proposals, especially the ones likely to be controversial or expensive. The tax incentive focused on the micro-chip industry will possibly spill over into other industries. A range of tax extenders for recently expired tax laws are mentioned as likely for inclusion during reconcilliation.

Next, we should look at political priorities and forecast how these might be introduced and play out in the reconcilliation process for the bill. For example, the bill’s emphasis on education might result in tax change here. Here are some other  thoughts: