US Business Has ‘Little Appetite’ For Tax Reform

by Leroy Baker, Tax-News.com, New York

14 December 2004

A recent report in the Financial Times has revealed that some US business organisations have little appetite for tax reform, and would prefer to see President Bush concentrate on deficit reduction and social security reform during his second term.

"While tax reform is important, we see it as subordinate to entitlement reform and getting the fiscal deficit down," stated John Castellani, president of the Business Round Table, an association of chief executive officers of leading US corporations, with members employing a combined workforce of more than 10 million.

Mr Castellani added that any tax reform should have a neutral impact, both in terms of government revenues and on the business sector, and warned that continual uncertainty over the future state of the tax code may be doing more harm than good.

"Radical tax reform would be complicated and could potentially be a long-term and politically contentious process,” he cautioned.

This was a view shared by John Endean of the American Business conference, a body representing mid-sized US firms, who told the FT that: "There is very little appetite in the business community for tax reform because they have so much invested in the current (regime).

Endean expressed hope that the bulk of the tax reforms will be restricted to individual rather than corporate taxation.

The road to tax reform will begin at a major economic conference later this week, which will be attended by US business leaders, economists and members of the Bush cabinet.

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