Thursday, February 07, 2008

"Dear God: Please Let these Survey Respondents Be Right!"

A survey of leading corporate tax executives by law firm Miller and Chevalier predicted few if any changes in the tax code (excepting the annual AMT and "tax credit" patch; the tax rebate and extension of earlier Bush tax cuts beyond 2010 were not considered) during 2008. Two of larger concerns at present are the effective tax rate and ramifications of FIN 48. Economic substance, hedge fund taxation and taxation of international activities also drew consideration as possible changes this year. It is possible that there may have been a conservative bias in the responses; Milt Romney was seen most favorably and Hillary Clinton and John Edwards were tied for least desired presidential option by the respondents.

The "practitioner prayer" in the title indicates that short of fundamental reform including simplification of the tax code and regulations, that the next best option is minimal change from one year to the next. For an example of the dangers of tinkering with the tax code, one must only look at how the proposed tax rebate has been loaded up in Senate deliberations.


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