The new administration’s policy agenda

President Donald Trump has a target―accelerate US GDP growth to 3.5% per year―and a clear metric for success: more US jobs. Will your business be prepared, as campaign promises become policy?

 

Overview

The new administration’s focus on tax cuts and deregulation has implications for the long-term: Can the US get on a steeper curve of productivity growth? Can it train the workforce of the future with the skills it requires? Can it create the physical and digital infrastructure to power a more industrious domestic economy?

Near term, we can’t underestimate the challenges in moving from campaign trail talk to firm policy direction. Even amid uncertainty, we’re tracking a few high impact areas to help businesses prepare to capitalize on new incentives.

 

 

Federal priorities

Tax reform

We’re watching the new administration’s moves on tax reform. Closely. A consensus has been building for some time to address perceived disadvantages for US business as a result of the corporate tax code. Even before the election, EU tax claims on American companies started the clock on US tax reform.

Tax proposals now under serious consideration aim to do more than reassert US jurisdiction. Lowering the corporate tax rate while tightening rules on international profit could free up significant capital for US investment. There are implications for supply chains and manufacturers as tax proposals aim to encourage more US production. We expect that there will be trade-offs, too.

Prepare for an overhaul of US international tax rules, including a one-time, mandatory repatriation tax on untaxed foreign income of US multinationals, and prepare for possible elimination of numerous business tax credits and deductions.

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Regulatory reform

We’re watching how President Trump will seek to reduce the regulatory burden on US companies. He expects to slow the pace of new regulations and eliminate those rules that are “wasteful and unnecessary” and not tied to public safety. While full repeals of post-crisis financial regulations such as Dodd-Frank and the Affordable Care Act are not likely to survive, Trump's health proposals would touch nearly every corner of the $3 trillion US healthcare market. We expect the broadest impact on financial regulation will come from his appointments to the federal agencies.

Prepare for things to get a little more complicated before they get more efficient, as the administration attempts to cut through red tape. Unwinding complex, systemic regulations will take time and require businesses to engage differently with their regulators.

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Infrastructure upgrades

We’re watching how the administration plans to increase what the US spends on infrastructure, including roads, bridges and waterways, to improve US economic competitiveness and spur job creation. These plans are taking shape at a time of significant change in the infrastructure industry. New sources of financing are emerging and the application of new technologies is changing what business needs and expects from infrastructure.

The renewed focus on fiscal stimulus through infrastructure spending can be traced to a dramatic change in sentiment about global economic policies. Pro-stimulus economists are looking at well-structured infrastructure investment programs as a means to spur both near- and long-term economic growth, with immediate impacts to be felt among domestic manufacturers.

Prepare for measures that at this stage look to rely principally on public-private partnerships and private financing supported by the use of federal tax credits.

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What’s on the minds of executives?

 

Industry perspectives

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Contact us

Barb Bukovac
US Retail and Consumer Tax Leader
Tel: +1 (312) 298 2563
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Amity Millhiser
Chief Clients Officer
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John Sviokla
Global Thought Leadership Leader
Tel: +1 (617) 530 5359
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Ken Kuykendall
Partner, Tax
Tel: +1 (202) 346 5160
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Brian Crane
Partner, Assurance
Tel: +1 (973) 236-4694
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Mark Strom
Global Operations and US Consumer & Industrial Products Operations Leader
Tel: +1 (949) 437 5438
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