Long overdue and ‘once in a lifetime event’ is how some have described US tax reform. The reality is different as policy makers struggle to reach agreement. Corporate and business tax reform are deemed to be easier than individual reform given general bipartisan agreement that the high US corporate tax rate is unsustainable for the 21st century global economy. In fact, the US corporate rate has long been eclipsed by those of most industrialised countries since the US last tackled tax reform in 1986.

Unlike 1986, the current highly polarised political climate, after a brutal 2016 election campaign, may not be conducive to bipartisan tax reform. That said, there have been bipartisan and bicameral discussions on various approaches. Despite a preference for bipartisan tax reform, however, the most likely path forward is by budget reconciliation that is not typically bipartisan.