Berkeley Law Professors Mark Gergen and Alan Auerbach, two of the nation’s leading tax law and policy experts, are giving mixed reviews to the sweeping new bill that President Trump signed recently.
The first major reform of the United States tax code since 1986 has triggered passionate, wide-ranging reactions throughout the country. This new legislation will affect the decisions of millions of Americans, from home ownership and health care to education and divorce.
The bill slashes corporate and many individual income tax rates, eliminates numerous deductions, and creates a new framework for international taxation. It is of the largest tax cuts in U.S. history, estimated at $1.5 trillion over the next decade, and will meaningfully redistribute the nation’s wealth.
Gergen and Auerbach say the reform is a mixed bag — and anticipate eventual corrective action.
“The legislation makes some improvements in the tax code, but overall has a number of significant problems that make it unlikely to be an enduring change,” Auerbach says. “These include the problematic treatment of pass-through entities, substantial increases in the federal deficit, a worsening of the income distribution, and a large number of important expiring provisions.”