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Congress to begin tax reform before the end of the year
Kirill Abbakumov   on Friday, September 8, 2017 at 12:00:00 am

On July 27, the Trump administration and House and Senate leadership issued a joint statement on the importance of and next steps for tax reform, which they hope to hold up as a major legislative accomplishment. In the statement, the two congressional tax-writing committees aims to develop and draft legislation that will result in a comprehensive tax reform suitable for the needs of modern America. The statement also suggests that collaboration between Democrats and President Trump is expected.

Simplification and lowering of tax rates could significantly boost economic development and help tax payers around the country, particularly in rural communities. The priority for economic developers focus on the possibility of tax-exempt status of municipal bonds and the deductibility of state and local taxes.

Tax-exempt municipal bonds are a critical financing tool for major infrastructure purposes, including roads, bridges, hospitals and schools. Additionally, eliminating deductibility of state and local taxes would be a double tax on individuals, significantly impacting local middle class tax payers and asking them to shoulder an increased burden for key local priorities.

While the statement is a positive indication of cooperation between Congress and the administration, the lack of details indicates much work remains to be done. Tax reform is complicated, and each member of Congress and the coalition are likely to bring different ideas and concerns to the table. Congressional leaders have aimed for initial drafts to be released in September after the August recess, though that month will also be consumed by federal budget and appropriations debates and potentially additional health care reform efforts.