- Massive overhaul of the U.S. tax system looks set to get the green light by Christmas.
- Whether U.S. tax reform will translate into a boost for U.S. President Donald Trump over the longer term remains to be seen.
A massive overhaul of the U.S. tax system looks set to get the green light by Christmas. But whether it will translate into a boost for U.S. President Donald Trump over the longer term remains to be seen, according to a former White House official.
Tony Fratto, founder and partner of Hamilton Place Strategies and deputy press secretary during George W Bush's tenure at the White House, told CNBC on Tuesday that the tax reform plan was a "big win" for Trump and the Republican party.
However, he added that it was uncertain whether this would lead to a bounce in the polls for Trump, or at the midterm elections for the GOP next year.
House and Senate lawmakers have begun wrangling over a tax reform plan that reconciles versions from both chambers. Sticking points have arisen, from a corporate tax rate to estate taxes. Still, Congressional Republicans hope to get a bill to Trump's desk by Christmas.
Fratto thought that was feasible. "There are some differences between the House and Senate versions but I'm very confident that they're going to get them worked out before Christmas and get a bill to the president's desk (by then)," he said.
"Whether this is enough to sustain the party going into the mid-term elections (in November 2018) is something we'll have to see. Is it enough to overcome those negative feelings (towards Trump in the polls)?"
Tax reform plans center on cutting corporate tax rates and some individual tax rates, as well as changes to several tax breaks. The bill assumes that tax cuts will encourage economic growth and will boost tax revenues over time. Its detractors say the richest will benefit most and that the U.S. deficit will grow massively before any benefits are felt.
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