The University of Florida Levin College of Law hosted Tax Reform: Perspectives From Across the Nation in the Chesterfield Smith Ceremonial Classroom on Tuesday.
This event was part of the tax analyst conference series co-sponsored by Tax Analysts and the American Bar Foundation, renowned for hosting live forums on tax practice and policy across the nation for the last 15 years.
The Panel: A distinguished panel of four led the discussion:
Mindy Herzfeld, law professor and director of the L.L.M in International Tax Program at UF;
Greg Rosica, tax partner at Ernst & Young;
Stephen Looney, Corporate and Tax Department chair of Dean Mead; and
Debora de Souza Correa Talutto, doctor of juridicial science candidate at UF.
Ariel Greenblum, editor of Tax Notes, moderated the panel.
The Focus: This discussion was centered on tax reform and its effect on small businesses. The panel theorized on how to create a reform that will promote job creation and reduce the complexity of tax code in the United States.
Background: The U.S. is experiencing severe consequences due to the current environment the tax codes have created. The economy, in particular, is suffering, according to the panel.
The current tax code causes the U.S. to be less competitive when compared to many European countries, resulting in more domestic businesses outsourcing. This hinders job creation and results in a loss of profit for the government.
Small businesses are also being crushed under the complex and perpetually changing tax code. This is problematic because small businesses are largely responsible for job growth in America, yet the current tax code disfavors them.
These issues have fueled some politicians to scramble to form a blueprint that will institute a tax reform allowing the U.S. to encourage small and large businesses alike to refrain from moving overseas and continue creating jobs.
Republicans in the House of Representatives plan to release details regarding the current draft for reforms within the next week; however, there is still no concrete plan in place for modifying or abolishing the current system.
The Questions: Greenblum moderated, then opened up the discussion to the audience consisting of students, former and current UF tax law professors, and practicing alumni.
Greenblum asked first, “Why should small businesses care about tax reform?”
“The complexity of the regulations are hurting small businesses. They do not have the resources that larger businesses have to find out what they are required to do and how to go about fulfilling the requirements,” Herzfeld responded.
She then elaborated on an uncertainty in the rules stemming from a concern over frequent law changes; the need for lower rates on small business income; and a need for fairness – or as Rosica later put it, “a more equitable code.” In essence, small businesses should care about tax reform because they need a reform.
“This is a much different conversation than what we’ve seen before,” Herzfeld added. “The conversation is shifting from a sole focus on corporate and international reform, to the role small businesses play within the larger focus on tax reform.”
Looney added that it is a mistake that small businesses have been ignored, emphasizing the need of a comprehensive tax reform. Roscia supported this by noting that the majority of taxes are not paid by bigger corporations – they’re paid by small businesses, making small businesses the true “backbone” of our country.
How to fix the glaring problems in the current tax code then became the theme of the questions.
Each panelist shared different views, from lowering rates to the merits of offering wage credits, however, de Souza Correa Talutto summed it up when she said, “It’s time to act now, but how? I’m not sure.”
The panel also addressed how global events have sidelined tax reform, leaving many in the dark with what tax reform would mean. The most effective reform may not be obvious, but the need for a reform is, according to the panel.
One cannot be idle or, as Herzfeld put it, “We don’t act at our own peril.”
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