1. TAX REFORM IN THE 115TH CONGRESS
Know your risks and your opportunities A Presentation by Mary Burke Baker, K&L Gates

2. IS TAX REFORM REAL? Is Washington just spinning its wheels?
What will tax reform look like?
What is the process?
When will tax reform happen?
Possible impact on trade with Canada
What should I be thinking about?
What should I be doing?
klgates.com

3. Is washington spinning its wheels?
Yes and no
Not the quick progress on tax reform expected
Doesn’t mean there is no progress
Many pressures to do tax reform
US competitiveness
Corporate inversions
“Race to the bottom”
OECD, EU efforts
Once in a generation opportunity
klgates.com

4. WHAT WILL TAX REFORM LOOK LIKE?
Trump Tax Plan
Income tax based system
15% business rate
Territorial/repatriation
End tax breaks for special interests
House Republican Blueprint
Cash flow, destination based consumption tax
20%/25% business rate
Full expensing/limited interest expense deduction
Senate efforts
Brushing off old plans
Hatch corporate integration
Regulatory reform
klgates.com

5. What is the tax reform process?
Budget reconciliation
Working groups
Stakeholder input
“Unified plan”
Regular order
Hearings
Mark-ups?
Bi-partisan participation?
Executive Orders
klgates.com

6. When will tax reform happen?
Timeline has slipped from first 100/200 days
Waiting on health care
Consensus among White House, House, Senate
Trump plan in September
October/November momentum
December 2017 or spill over into 2018
Content will drive timing
Timing will drive content
klgates.com

7. Possible impact on trade with canada
Border Adjustment Tax/Reciprocal Tax
No US deduction for imports
US exports not taxed
Retaliation by Canada?
WTO reaction?
Impact on treaties – NAFTA, tax
Increase in US prices?
US exports more competitive?
Currency fluctuations?
Territorial
Base erosion measures
klgates.com

8. What should I be thinking about?
Obvious: how will tax reform affect your business?
What is your bottom line?
What are you willing to give up for lower rates?
Which deductions, credits, and other benefits are critical to keep?
Which deductions, credits and other
benefits would you like to see added?
What transition rules are important?
What regulations would you like changed?
How will OECD/EU actions affect business?
klgates.com

9. What should I be doing?
Obvious: you need to be plugged in and know what is in play
Diagnostic to test impact of various proposals
Look at entire package, not specific provisions
Apprise the C Suite
Strategy to combat risks and exploit opportunities
Coordinate with similar stakeholders
Don’t sacrifice your own specific concerns
Don’t assume nothing will happen
klgates.com

10. Thank you. Mary Burke Baker mary.baker@klgates.com