The latest Barron’s includes opposing views from the financial sector about the prospects for a tax reform package.
[W]ill it pass Congress? On that question, views in the financial world diverge. David Kotok, chairman and chief investment officer of money manager Cumberland Advisors, is firmly in the “Yes” camp, while a team of UBS economists write that legislation “is unlikely this year or next.”
In a recent note to clients, Kotok wrote that the Republican leadership must pass a tax bill and “will compromise to get it, no matter what they have to exchange for the necessary votes.” …
… Sounds plausible—though it hasn’t won over UBS. In a commentary written after the House introduced its bill, but before the Senate went public with its alternative, the UBS team commented, “We have long held the view that finding the revenue offsets for the ambitions tax-reform plan would be difficult.” The report added that “the only way to achieve such large offsets is to eliminate or drastically reduce current deductions or subsidies. Any group that loses their specific subsidy will likely oppose the plan.” …
… Meanwhile, the market can’t decide who’s right. Daniel Clifton, Strategas Research Partners’ policy research chief, says that stocks are pricing in, at most, only a 30% chance of a bill becoming law.