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Analyst: Despite Lobbying, Congress Unlikely To Engage In Tax Policy Fine-Tuning

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Analyst: Despite Lobbying, Congress Unlikely To Engage In Tax Policy Fine-Tuning
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There’s plenty for Americans on both sides of the political aisle to hate in the new tax law, but investors shouldn’t expect any changes to the new law in 2018. The new rules are here to stay, at least this year, said Height Securities analyst Stefanie Miller.

In a new report, Miller said there are numerous items to improve in the new tax law, but bringing the issue up in Congress would open up such a large can of worms that Republicans have no motivation to do so.

“We assign 20-percent odds that Congress will pass a bill to change tax policy in [calendar] 2018 despite the fact that businesses and individual taxpayers will lobby for changes to the recently amended tax code,” Miller said. 

Height Securities named four reasons why it projects the new tax law isn't going anywhere this year:

  • Republicans will need bipartisan support in the Senate.
  • Congressional staff members are too fatigued from working on the law and many have moved on to trade policy.
  • Fiscal conservatives will likely oppose any potential changes that would add to the deficit.
  • There are so many things to improve about the current law that a Congressional discussion could devolve to a circus fairly easily, Miller said.

“If Congress makes a change for one group, it will open a Pandora's Box, especially ahead of an election." 

Investors are perfectly fine with the new tax law as-is. Since the tax reform debate started gaining steam about six months ago, the SPDR S&P 500 ETF Trust (NYSE: SPY) is up 13.7 percent and the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) is up 20.3 percent.

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Posted-In: CongressAnalyst Color Futures Politics Top Stories Markets Analyst Ratings General Best of Benzinga

 

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