Tax officials at some of America’s biggest companies are discounting chances that Republicans will be able to rewrite the tax code by next year, saying Wednesday that they’re going about “business as usual.”
The bearish assessment suggests little faith in the GOP, which has for years promised a massive tax code overhaul if voters gave the party control of Washington.
Now in control, however, Republicans have struggled to find unity on a plan that can flatten the code while not sending the country spiraling into debt or angering key constituencies.
Meaningful tax reform by next summer is “less likely than not,” said Jeffrey Maydew, who works in global tax planning at the legal firm Baker McKenzie.
And big changes are unlikely to happen at all if things don’t materialize by early next year, said Christopher J. Wolter, vice president of tax for Boeing, who says he’s “less optimistic than I was” about major action before next summer.
“Who knows what the elections look like,” Mr. Wolter said. “And if we’ve lost this opportunity, we may have lost it for, I’d hate to say it, but maybe for the rest of my career.”
Dave Koenig, vice president for tax at the Retail Industry Leaders Association, a trade group, said it depends on the definition of “meaningful.”
“I think we will have tax legislation,” Mr. Koenig said. “Whether it is comprehensive tax reform or more of a tax cut we’ll see.”
But Judith Lemke, vice president of tax at Corning Incorporated, a glass manufacturing company, said she cautioned her management team earlier this year not to get too excited about the prospect for major changes until the plans actually came out.
“It’s hard to count on tax reform,” said Ms. Lemke, who was also a top adviser to former Senate Finance Committee Chairman Max Baucus.
“In the meantime, we continue to plan sort of business as usual with a very close eye on tax reform. I think the calendar is getting quite challenging,” she said.
The business leaders were speaking at an event in Washington, D.C., hosted by Bloomberg BNA as House, Senate and White House officials try to jump-start momentum on the issue before lawmakers head home for their August recess.
“We’re all on board to do it this year,” Gary Cohn, director of the White House National Economic Council, said Wednesday on Fox News.
Senate Finance Committee Chairman Orrin G. Hatch said at the BNA event he’s generally optimistic about the prospects for some sort of tax package, but said lawmakers should temper desires to “swing for the fences.”
“While I think we should be ambitious, we must also be realistic,” the Utah Republican said. “At the end of the day, any bill or proposal that can’t get 51 votes in the Senate and 218 votes in the House is, not to put too fine a point on it, a waste of time.”
Mr. Hatch said he’s willing to stomach an initial drop in revenue from lower tax rates if it puts the economy on a path for growth. In addition to lowering individual rates, House Republicans have proposed cutting the corporate tax rate from 35 percent to 20 percent, while the White House wants an even steeper corporate rate cut, to 15 percent.
But Mr. Wolter said there simply aren’t enough viable revenue offsets to bring rates down to the levels the GOP wants.
“The math doesn’t work,” Mr. Wolter said. “It’s $100 billion over 10 years for each point you take off the rate, and there’s not enough things to add up to what you’re going to get down to.”
Ms. Lemke also reminded people that Republicans have plenty on their plate outside of taxes, including health care, the looming debt ceiling fight and the ongoing investigations into Russian interference in last year’s election.
“I mean, it just starts to be a daunting calendar,” she said. “If you don’t get something done in the first quarter of next year, then you’re starting to look at elections, right, and the closer you get to elections, the less people want to talk about tax reform.”