國情咨文：大選后對財務團隊的影響.pdf

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1、State of the Union:Post-Election Implications for Finance teams2024 AICPA&CIMA Future of Finance SummitDecember 12,2024Mark PetersonExecutive Vice-President,AdvocacyTrump Administration19827210218 VOTES FOR MAJORITYP RES ENT A TI ON CENT E R 20 24|AS OF 11/8/24,9:29 AM BASED ON AP DATANOT CALLEDREPU

2、BLICANDEMOCRATResults Show a Red Shift Across the U.S.Source:The New York Times,November 18,2024Source:The New York Times,November 6,2024,as of 4amPresident Trump performance by countyAppeared to improve on election night among many types of counties,including ones that had supported him in past ele

3、ctions as well as ones that have historically leaned DemocraticIncumbency is a Liability EverywhereIncumbents Losing Around the World Post-PandemicDemocrats lost Presidency&SenateGoverning LDP suffered its 2nd worst result in history,losing lower houseANC lost parliamentary majority for 1st time sin

4、ce apartheid endedModi reelected but lost outright majority in parliament for 1st time in a decadeRuling Tories ousted from UK government after 14 yearsRuling conservatives landslide loss in parliament to liberal oppositionMacrons centrist alliance failed to secure a majorityDPP held Presidency but

5、legislative Yuan control flipped to KuomintangSource:GallupTrumps Path to Enacting PoliciesSource:Your Guide to Trumps Day-One Agenda From Taxes to Tariffs119th House:3rd Single Digit Margin in a Row119th Congress An Even Closer HouseJanuary 3,2025:219 Republicans 215 DemocratsJanuary 20,2025:217 Re

6、publicans 215 DemocratsVacancies not filled until April at earliestA tie in the House fails.217-215 means no room for error for the majority.Bottom line:For the first 100 days of the Trump Administration,House Republicans will need to maintain perfect party disciplineWAORCANVIDWYMTUTCONMAZTXLAAROKKS

7、MOIANENDSDMNWIILINOHMIKYTNMSALGAFLSCNCVAWVPANYMEAKHIMDMARICTDENJVTNHRepublican heldDemocratic heldSpecial election No election2026 Senate MapGovernment funding expires December 20,2024Continuing Resolution(CR)Possible late push to delay FinCEN BOI by one yearDebt ceiling resumes January 1,2025Extrao

8、rdinary measures could run out as early as MarchSenate set up for confirmations Hearings can occur in the 118th CongressVote must take place in the 119th CongressSet up for budget reconciliation process No legislation,drafting and process conversations ongoingLame DuckLook Back Mechanism and Legacy

9、ProofingCongressional Review ActEnacted in 1996 providing Congress limited time to review Administration rulesAgency prohibited from reissuing rule in substantially the same formMost relevant during Presidential transitionsAimed at“midnight rules”Provides 60 Senate session days or 60 legislative day

10、s in the House for reviewUnofficial estimate August 1,2025Trump Proofing14 states with Democratic controlled governorshipBlue states can theoretically fight Trump policies through state legislation,lawsuits,ballot initiatives and executive action by the governors officeCalifornia and others setting

11、up funding and waivers at federal level“Every tool in the toolbox has got to be used to protect our citizens,to protect our residents and protect our states,and certainly to hold the line on democracy and the rule of law as a basic principle.”Massachusetts Governor Maura Healey(D-MA)The MilitaryChur

12、ch/Org.ReligionPublic SchoolsOrganized LaborBanksSupreme CourtPresidencyNewspapersBig BusinessCongress010203040506070A Crisis of Authority:Institutions Not Trusted19772024197720242024202420242024202420242024202419771977197919771975197919771977A Great Deal/Quite a Lot of Trust(1975 2024 U.S.)%with a

13、Great Deal/Quite a Lot of TrustSource:GallupFederal OutlookLead Republican on Senate Intel CommitteeKnown as a“China Hawk”Recently sent letter to PwC Global Chairman Mohamed Khande Expresses concerns over PwCs“ties to the Chinese Communist Party”Introduced Trusting Foreign Auditing ActIntended to ap

14、ply certain provisions of the HFCAA to audit firms located in China,Russia,Iran,and North KoreaSenator Marco Rubio(R-FL)Nominated to Secretary of StateScott Bessent Nominated as Treasury SecretaryHedge Fund ManagerFounder of Key Square GroupMacro global investment firmFormer Partner at SorosHead of

15、London OfficePolitical Science degree from Yale UniversityPaul Atkins Nominated as SEC ChairSEC Commission Chair from 2002-2008Consistent advocate for transparency and the use of cost-benefit as part of rulemakingU.S.representative to several international economic bodiesFormer PwC partnerCurrently

16、leads client work at Patomak Global Partners,LLCFormer GOP Congressman from Missouri from 2011-2023Did not serve on House Ways and Means CommitteeFormer auctioneer Lost Senate primary in 2022Has run an advisory business helping businesses claim the Employee Retention Tax Credit(ERTC)Trump will need

17、to fire Daniel Werfel and Long will need to be confirmed by SenateFormer Congressman Billy Long(R-MO)Nominated as IRS Commissioner Empower the CFPBDiversity&inclusion Housing:permitting,zoning reformMinority lending expansionFair lending enforcementCrypto:pro-regulation,stablecoinsCommunity Reinvest

18、ment ActAnti-discrimination in bankingFraud&scamsHouse Financial Services Committee LeadershipHousing financePrudential banking reformsDigital AssetsCap Markets(Employee Ownership,Go/Stay Public)CFPB+SEC guardrailsIran SanctionsU.S.Leader to IMFSEC Overreach/ESG LimitsIPO RevivalCapital Formation Bo

19、ostHousing:HUD Oversight/AffordabilityInsurance:Risk Review/Market StabilitySanctions(Iran,CCP,Burma)CFPB overreach Banking fair accessM&A shot clockESG overreachSanctions enforcementExport controls/CFIUS reviewHousing plus agendaAndy Barr(R-KY)Bill Huizenga(R-MI)French Hill(R-AR)RepublicansDemocrat

20、Maxine Waters(D-CA)Senate Banking Committee LeadershipHousing/HUD reform(ROAD to Housing)Cap markets reform(EMSAA)Protecting state-based insuranceNFIP reformCFPB/FSOC/SEC overreachBolstering Iran sanctionsDemocratRepublicanTim Scott(R-SC)Elizabeth Warren(D-MA)Regulatory oversightStrengthen CFPBStude

21、nt loan reformLimit exec comp and buybacksLiability for fraud and scamsLimit mergersCurtail monetization of consumer dataExpand credit for underservedJunk feesSenate Finance&House Ways and Means Committee LeadershipIncreased corporate rates and income taxes on high income householdsChild tax credit

22、expansionR&D expensingLIHTC/MIHTCTax on unrealized gainsTax treatment of digital assetsDemocratRon Wyden(D-OR)Mike Crapo(R-ID)RepublicanTCJA extension/permanenceProtect SALT capR&D expensingBonus depreciationSECURE 2.0 tweaksCTC fixesBook Minimum Tax RepealSENATEJason Smith(R-MO)RepublicanTCJA exten

23、sion/permanenceR&D expensingReduced corporate ratesLower individual ratesBonus depreciationReshoring incentivesDemocratRichie Neal(D-MA)Increased corporate rates and income taxes on high income householdsChild tax credit expansion/permanenceEITC expansionLIHTCIncreased IRS enforcement Tax-exempt mun

24、icipal bondsHOUSEOutlook:Chairman Ron Wyden(D-OR)and Ranking Member Mike Crapo(R-ID)will likely remain committee leads in the 119th CongressOutlook:Chairman Jason Smith(R-MO)and Ranking Member Richie Neal(D-MA)will likely remain committee leads in the 119th Congress SEC/PCAOBSEC Chair Gary Gensler t

25、o resign on January 20,2025Acting chair either Hester Peirce or Mark UyedaCommissioner Jaime Lizarraga to step down on January 17,20252-1 commission until replacements confirmedNew major division directors appointedPotential Trump Agenda:Less focus on enforcement,ex.ESG and crypto,penaltiesFocus on

26、egregious fraudulent activities SEC under Trump Administration 2.0Gary GenslerHester PeirceMark UyedaJaime LizarragaTrump Administration 2017Three board terms had expired,one was vacant,one board seat not extended when expiredBiden Administration 2021Fired PCAOB Chair William Duhnke and solicited ne

27、w applications for all five seats,none of which were expiredTrump Administration 2025Expect current PCAOB Chair to be removedOther board members could be replacedPotential PCAOB Changes Under a Trump AdministrationPCAOB Current PCAOB Chair Erica Williams has bragged about setting record level moneta

28、ry penalties on firms Board Member Christina Ho has pushed back on recent proposed rules criticizing the board for not being focused on audit quality The two CPAs on the board have voted against proposed rules Could see greater focus on audit quality and decreased focus on enforcement PCAOB Chair un

29、der first Trump administration testified in Congress that there is overlap with the SEC and PCAOBSource:Critics see chance to close down U.S.audit regulator under TrumpTrump PoliciesTrump Administration Outlook:TariffsTrump campaign proposal:10%-20%across-the-board tariffs,up to 60%on Chinese import

30、sRecent threat:25%tariffs on Mexico and Canada,and an additional 10%tariff on China,citing illegal immigration and fentanylSome see Trump tariff threats as a negotiating tactice.g.,Canadian Prime Minister Justin Trudeau met with Trump at Mar-a-Lago and his government soon announced beefed up border

31、security.He had a similar call with the Mexican president.Effect to supply chains will impact businesses of all sizesThe overwhelming majority of states count Canada,China,or Mexico as their top import partner.Trump Administration Outlook:Workforce PoliciesImmigrationHigher scrutiny and restrictions

32、 on visa applications may make it harder to recruit overseas high-skilled talent.Internal enforcement could hit service sector.Overtime ruleMany employers changed pay structure to be in compliance.Courts have put the rule on hold and Trump DOL likely to rescind.Fiduciary ruleDirect impact on financi

33、al services sector,likely to be reversedNational Labor Relations BoardWill be more sympathetic to business in management-labor disputesApprenticeshipsTrump DOL could rescind Biden reforms to program and reinstate its old industry-recognized apprenticeship programDOGE:Whole Cloth Bureaucracy ReformWa

34、ll Street Journal Opinion by Elon Musk and Vivek RamaswamyCritical of ballooned bureaucracy A mandate of“sweeping change”for President-elect Trump Department of Government Efficiency Task:Eliminate$500B+annual overspendingProcess:Use executive authority under existing laws(not pass new laws)North St

35、ar:West Virginia v.EPA(2022)Loper Bright v.Raimondo(2024)Outcome:Liberation from illicit regulations and stimulate the U.S.economyDelivery Date:July 4,2026 250th Anniversary381582113201242165222323113TH (2013-2014)114TH (2015-2016)115TH (2017-2018)116TH (2019-2020)117TH (2021-2022)118TH (2023-2024)A

36、I Legislation since 2014Profession advocacy two-fold:1.Education:attest goes beyond audit2.Resource:be the first call for any third-party assessment legislationExample:Validation and Evaluation for Trustworthy(VET)AI ActPolitical situation is complexTech issues are not always partisanHouse Republica

37、n leaders willing to consider targeted AI billsSome Senate Republicans open to comprehensive,bi-partisan solutionDemocratic caucus similarly conflicted on approachProfession:an engaged stakeholder groupBills Not Signed Into LawBills Signed Into LawAll AI BillsThe Future of AI PolicyFederal Tax Outlo

38、ok:Reconciliation?Why This Might Be ChallengingHigh-cost policies in a tough fiscal environment(debt limit extension expires January 1,2025)Reasonable estimates show that President-elect Trumps tax plan could increase the debt by$7.5T against backdrop of high annual deficits Aligning campaign pledge

39、s with realitySALT deduction cap increase,no taxes on tips,no taxes on overtimeComplex policies in a high-turnover CongressMany veteran tax-savvy lawmakers and staff left after TCJA,remarkably complex issues at play Extremely narrow majorityMapped out plan to pass a non-tax reconciliation bill withi

40、n first 30 days of 2025,followed by a second tax reconciliation bill later in 2025 John Thune(R-SD)Senate GOP Leader“If they do that process,I think they are creating an opportunity to raise taxes for all Americans.”Jason Smith(R-MO)House Ways and Means ChairmanGOP Reconciliation Strategy:Border or

41、Tax Bill First?GOP Trifecta Unlocks Fast Track“Reconciliation”Tax BillMulti-stage process to unlock“fast-track”procedures for a federal tax bill:1.House and Senate must pass the same budget resolution with same directives to committees2.Committees produce legislation achieving budget resolution reve

42、nue and savings goals and assemble into an omnibus reconciliation bill3.House and Senate both allowed simple majority(218 and 51)to pass 4.Resolve differences,if any5.Reconciliation bill signed into law Key rule:changes must be primarily intended to affect spending and raise revenue(no regulatory ch

43、anges)Opportunities for intraparty obstacles and disagreement,and tight margins of controlBreaking Down the Senates“Byrd Rule”Byrd Rule is NOT self-executing:Senators must take action 60 vote threshold required to dismiss a Senators point of order that a provision is in violation of the Byrd RuleIf

44、a provision is removed from the bill under the Byrd Rule,it cannot be added back in via amendment Named after a former Senator,the Byrd Rule protects the effectiveness of the reconciliation process by blocking“extraneous”provisions unrelated to budget impact goalsDefining“extraneous”through lens of

45、tax proposals:1.Does not produce a change in federal outlays or revenues(ex:mobile workforce tax simplification act only impacts state coffers)2.Produces a change in federal spending or revenues that is secondary to the non-budgetary component of the provision(ex:immigration reforms generate revenue

46、,but primary purpose is to change immigration law)3.Provision is outside jurisdiction of committee that submitted idea(ex:Dear Foreign Affairs Committee,no one cares about your education tax proposal)4.Increases the deficit beyond the ten-year budget window(ex:a 15-year SALT cap increase)5.Recommend

47、s changes to Social Security(ex:proposal to exempt Social Security benefits from federal taxation)World of Revenue Raisers is Theoretically Unlimited SALT cap extensionRoll back Inflation Reduction Act tax credits Roll back Inflation Reduction Act IRS funding Corporate income tax rateEliminate or re

48、duce student loan interest deduction Entitlement reformConsolidation of education tax credits/deductionsLIFO repealCash to accrualTax exempt sector reform Eliminate/roll back deductions International TaxTax college EndowmentsPartnership reformTariffsIndividual Tax Changes“Everything is on the table”

49、Mike Crapo(R-ID)Incoming Senate Finance Committee ChairmanRevenue Effects of President-Elect Trump Key Tax Proposals Individual TCJA permanence(-$3.4T)Restore full deduction for SALT(-$1T)Extend TCJA estate tax policies(-$205B)Exempt social security benefits from income tax(-$1.2T)Create itemized de

50、duction for auto loan interest(-$61B)Exempt overtime pay from income tax(-$748B)Exempt tips from income tax(-$118B)Lower corporate rate to 15%for domestic production(-$361B)Repeal Inflation Reduction Act IRS funding(+$60B)Repeal Inflation Reduction Act green energy tax credits(+921B)Impose universal

51、 20%tariff on imports+50%tariff on imports from China(+3.8T)Restore TCJA Business Tax Provisions(-$643B)Expand Higher Education Excise Tax(+$350M)Federal Debt as a Percentage of GDPSource:Congressional Budget Office,June 2024IRS Funding Issues on the Horizon in 2025 Republicans have been clear that

52、they are interested in clawing back remaining Inflation Reduction Act(IRA)funds given to the IRS(approximately$60B)AICPA is educating lawmakers on difference between enforcement and taxpayer service fundingCR drafting error could impact IRS enforcement funding early in 2025 Profession Opportunities

53、and Challenges in 2025 Tax BillOpportunities Mobile Workforce Tax Simplification TCJA business relief“fixes”(prospective)Expanding use of 529 accounts for would-be CPAs(exam prep,test fees,training)Extending Section 199A deduction(expansion unlikely)Lift Form 1099-K threshold Permanent disaster tax

54、relief provisions Remember:large federal tax bills historically create a need for future technical corrections-opportunities for more policy changes Challenges Byrd Rule could prevent some profession priorities from being included in bill High-cost items(expanding Section 199A)may be kept out Revenu

55、e raisers on menu that have profession impact(changes to tax-exempt sector,cash to accrual reform,partnership reforms,IRS service funding claw back,profession workforce challenges caused by retroactivity and mid-filing season tax billsThank you 2018 Association of International Certified Professiona

56、l Accountants.All rights reserved.Thank youThank you 2024 Association of International Certified Professional Accountants.All rights reserved.This presentations images are subject to copyright protection and used under license from third parties.Do not use images from this presentation in other presentations or documents without first consulting with Legal.The use of copyrighted images outside the licensed scope constitutes copyright infringement and subjects the user to monetary damages and other penalties.2201-15634-2023