Tax executives hope for-but do not expect-a Republican candidate to win the White House this fall, although they anticipate the GOP will take control of the Senate to control both houses of Congress, according to a new survey.
Tax executives from major corporations and trade associations were surveyed by the Washington, D.C., law firm of Miller & Chevalier to determine what tax issues are of most concern to them and what they would like to see come out of the 2012 elections.
Of the 180 respondents to the survey, most (67%) say Mitt Romney is the GOP candidate who would act most favorably on tax matters of importance to them, including business income tax, fundamental tax reform and international competitiveness. However, they do not anticipate a change in the White House and 85% say President Obama is the least likely to act favorably to business on tax issues.
Although they say President Obama is the most influential individual on tax policy matters, they also say his priorities in influencing tax policy this year will be outweighed by the split in control of Congress.
Most say there will be no movement on tax policy changes this year because of the pending elections. A majority of respondents (61%) ranked the elections as having the most significant impact on tax policy this year, while 17% think the split in Congressional control is the most significant issue. Only 7% say President Obama's priorities will be the biggest factor in tax policy changes.
Reform will more likely come in 2013 and 2014, the survey says, when 60% predict the GOP will control both houses of Congress.
Among other issues, any long-term agreement on individual tax cuts will be postponed until after this year, the survey says.
The business community has called for significant tax reform and among the tax executives surveyed 31% say the corporate tax rate is of the most concern, while 30% say taxation of international operations is the top concern.
An increase in the U.S. taxation of international operations is ranked as likely by 62% of respondents, while 51% think industry specific taxes or fees will be raised, and 33% feel reductions in spending will be undertaken by Congress to raise revenues this year.
"Expectations for tax legislation are low for the remainder of the year," said Marc Gerson of Miller & Chevalier and former majority tax counsel to the U.S. House of Representatives Ways and Means Committee.
"Respondents see the pending Presidential and Congressional elections, coupled with the split in Congressional control, as likely putting a significant damper on the tax legislative agenda for the remainder of 2012."