Tax Reform Plans: A Global Overview

Tax reform plans are often in the making in different parts of the world.  In this article we examine what is going on in the Philippines, the US and Great Britain.

First, the Duterte administration is moving toward more inclusive economic growth, with an assurance from the business community supporting tax reform plans. The  Comprehensive Tax Reform Program (CTRP) is being put to the BusinessWorld Economic Forum.  Chairman of the Metro Pacific Investments Corporation, Manuel V. Pangilinan, said “CTRP is central to DuterteNomics; it is in fact the catalyst to the government’s 10-point economic program. That is why I believe the business sector should support it.”

Second, it’s quite interesting what is happening with tax reform in America, primarily because of how concise the plan is.  In just one page, Trump outlined possibly the largest tax cut individuals have received (since Reagan’s administration) in his tax code reformation proposal. Should it go ahead, a reduction from seven to three in the current tax brackets would be implemented with rates of 10 percent, 25 percent and 35 percent. a married couple would have nearly double in their deductions and would not even have to any amount of taxes on the first $24,000 income they earn, effectively creating a zero tax rate. Tax breaks for charitable giving, mortgage interest and retirement savings would remain in place.

Trump also is seeking to eradicate state and local tax deductions.  According to the Tax Policy Center, the SALT deduction is one of the largest federal tax expenditures, with an estimated revenue cost of $96 billion in 2017 and $1.3 trillion from 2017 to 2026, in an effort to put an end to the Alternative Minimum Tax (AMT) which calls for over 5 million taxpayers to calculate their liability twice and then pay the higher amount.

Third, when looking at the situation in Great Britain, Theresa May is running on a platform of tax reduction for businesses and working families. She is promising no increase in value-added taxes and a maintenance of plans to cut corporation tax to 17 percent by 2020.

James Cannon

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com