Tax reform: What can you expect next?
What will potential tax reform mean to you? With tax legislation being a hot topic on Capitol Hill, we’re here to help you sort through the rumors to understand what could happen next.
What is tax reform?
Tax reform is legislative action to rewrite the tax code—how the federal government collects money through taxes from people and businesses to pay for government services (such as military defense, Medicare and Social Security, etc).
Tax rules and regulations are updated frequently, but there hasn’t been a thorough overhaul of the tax code since 1986. A tax reform bill is currently being worked on in the House of Representatives as a result of:
- Campaign promises
- Party and political interests
- Expectations that such a bill could successfully pass
How tax reform happens.
Cutting taxes will likely be a big part of tax reform, which reduces revenue that pays for federal programs and services. Tax reform legislation will offer ways to balance cuts and expenses by taking from some areas and giving to others.
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