Tax Reform Proposal “What-If” Game
Last week President Trump released his framework for tax reform.
One of the favorite games being played by the financial media and tax experts is the effect of the proposals on our clients and how to protect them from the bad parts and how to get a bigger share out of the good parts. This is a game I do not wish to play. I will if CNBC, CNN or any of the major NY stations ask me to appear and give my opinion, which they have in the past, but otherwise, I am sitting it out.
The tax laws as constituted are unbelievably complicated with intricate clauses, myriad deadlines and penalties and loopholes just waiting to be uncovered. Assuming we have limited time and energy it seems it would best be spent working on what we already have in place to help clients as much as anyone can. Diverting that attention to play a what-if game makes no sense to me and will not make any of my clients richer. Instead of our clients asking how they will make out with “tax reform” they should be asking how they can save taxes right now using the existing laws.
We are near the close of the year and there are many creative year end moves we can suggest. Passing them up to prepare a what if model seems to me to be a waste of time and energy. I also discovered a long time ago that clients don’t mind paying fees for positive results and even for diligent attempts to get positive results; while they question why they are being charged for what-if scenarios for something that is not law, might not become law, and might have no prayer of ever saving them a single cent.
When the law is written and the potential for enactment is there, serious actions will be discussed since I will be jumping on it. Right now the only thing I could see that makes any sense is to suggest that clients accelerate as many deductions into 2017 as they can – but that is pretty much what I am suggesting anyway – with or without the threat or glimmer of tax reform. I’ve been through this before. The best way to proceed is to keep alert for our clients in their present situation with the present tax laws and the probable progression from that – not a what-if game that produces an ethereal result.
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