In record time, Congress has passed the first major tax reform bill since 1986. So now what? In this Marketplace series, we talk to business owners, economists and families about how they see their futures under the new tax system, while answering listener questions along the way. You can find those stories and more of our tax coverage here.
The Republican tax bill was over one thousand pages long, which is a lot of policy and detail to read through. But if you're an employee or a CEO, what you really want to know is how does this impact me and my business. Lisa Goldenberg is the president of the Delaware Steel Co., and one CEO who is waiting to see exactly how the bill will impact her. Marketplace host Kai Ryssdal called her up to get her thoughts on the tax plan now that it's passed. The following is an edited transcript of thier conversation.
Kai Ryssdal: Last time we talked you were hopeful but not really counting on this tax bill getting done. And now here we are.
Lisa Goldenberg: Yeah look, I've been wrong before but I don't know how wrong I really am, Kai. Here we are, the end of the program, we're going to have a tax bill and nobody knows what's in it and there's so much horse trading going on till the last second. In preparation for our call I think I've spoken to well over a dozen people and not a single one can tell me how it's going to affect them. Granted I'm speaking to certainly the top 1 percent, but I've spoken to people in service industries, manufacturing, billion dollar businesses, $2 million businesses and yet not one person has said it's going to really help me.
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Ryssdal: Wow. I'll be honest with you that is not what I expected to hear you say.
Goldenberg: Me either which is why I was so hopeful to get a tax bill passed. Of all the things I could hope in a Trump presidency, I really felt that I would stand behind this. And based on what I'm seeing, I can tell you for me personally aside from the business, I have a wonderful second home and I am going to loose everything that helps me to keep that. I think it's really going to hurt real estate values. And I think the social programming that is getting paid for is going to get dropped in order to pay for some of this budget and then it's going to get kicked to the states. We've already lost our state and local tax deduction. So it's going to hurt us even worse, state taxes are going to have to go up.
Ryssdal: Talk to me for a second though about the business. You must be looking forward to your business and corporate taxes going down.
Goldenberg: Corporate taxes, the effective tax rate, are already really low. So I think that for certain businesses, I cannot tell you if it's going to affect mine in this way, for certain businesses you are going to get an effective lowering. And in my opinion, perhaps, use that for capital expenditure, in an ideal reality. But as a dear friend said to me, "Lisa, do you pay on performance or on tax savings?" I can't see a corporation in America that's going to get a tax refund and say, "You know what? I'm going to redo my whole pay structure based on this — no one's now going to get paid on performance. We're going to redo it based on tax reform." It's illogical.
Ryssdal: You know what's funny is we talk on the program all the time about how businesses hate uncertainty and here you are a woman running a not small business literally looking uncertainty in the face saying, "yeah, I don't know."Goldenberg: What are you going to do? The stock market's happy. They're looking at the uncertainty and saying "well we're going in the right direction," because I think we have things that are on the table that are very important. How they leave the table is the uncertainty piece that people seem to be tolerating more and more. I think just with this administration our ability for uncertainty is we're being stretched, maybe we're maturing? I don't know? But business hates uncertainty and yet look at the stock market.
Ryssdal: Do you think, as the GOP has promised, that this is going to simplify your life in any way?Goldenberg: Well if no one can answer what the tax code is going to do because it's so confusing I can't see it simplifying in the short term. Will fewer tax brackets simplify the ability to handle taxes? Probably. I think once we get through it but we're talking about a thousand page bill. So even if you were inclined to read it you wouldn't be well-educated, you're not at the table. So what's simple about that?