Ernst & Young Partner Optimistic About Tax Reform

The transcript discusses the complexities of tax reform, focusing on budget constraints, revenue neutrality, and the challenges of passing tax cuts. It highlights the optimism surrounding tax reform despite potential obstacles, such as the deductibility of state and local taxes and the impact on red states. The discussion also touches on the tax elements tied to healthcare reform and the Affordable Care Act, particularly the net investment income tax.

What is a major challenge in achieving revenue neutrality in tax reform?

• Increasing corporate tax rates

• Finding new sources of revenue

• Reducing government spending

• Eliminating all tax deductions

What is a potential issue with pass-through taxation?

• It simplifies the tax code

• It increases state revenue

• It could lead to everyone becoming a corporation

• It reduces the need for tax cuts

Which states are likely to oppose changes to the deductibility of state and local taxes?

• Illinois, Michigan, Wisconsin, and Indiana

• Nevada, Arizona, Utah, and Colorado

• Texas, Florida, Ohio, and Georgia

• California, Connecticut, Massachusetts, and New York

What tax element was tied to the repeal of the Affordable Care Act?

• The estate tax

• The sales tax

• The 3.8% net investment income tax

• The corporate tax rate

What might happen if the 3.8% net investment income tax is not repealed?

• It could become part of the tax reform package

• It will be eliminated immediately

• It will increase to 5%

• It will only apply to corporations