Survey Reveals Concerns of Tax Leaders Ahead of 2024 U.S. Presidential Election
Tax leaders are on high alert as the November U.S. presidential election approaches, with concerns mounting over potential changes to key tax policies. According to the 2024 BDO Tax Strategist Survey, released on Monday, strategic tax leaders are particularly worried about alterations to certain Inflation Reduction Act renewable energy credits, while tax tacticians are focused on potential shifts in federal corporate tax rates.
The survey, which polled 180 senior tax leaders at companies with revenues ranging from $250 million to $3 billion in February, highlighted the significant impact the election outcome could have on national and local tax policies in the U.S. “Changes to corporate tax rates, customs and trade regulations, incentives and credits, and IRS funding may all be impacted by the election,” the report stated. It also noted that 86% of tax leaders view policy shifts as a significant challenge for their organizations this year.
In response to changing regulations, rapid growth, and outdated technology, nearly half (44%) of organizations are planning to increase investment in tax risk management in 2024. Todd Simmens, tax policy and legislation practice leader at BDO USA, emphasized the importance of staying informed about potential tax policy changes to navigate challenges proactively.
International policies and rules, such as those related to Pillar Two of the OECD’s framework to address base erosion and profit shifting, will also be crucial for companies with an international footprint. The survey revealed that over 140 jurisdictions have agreed to adopt a two-pillar solution under the OECD framework, with around 30 already enacting Pillar Two legislation or in the process.
Additionally, the survey explored attitudes toward artificial intelligence, with slightly more than half of tax leaders (51%) planning to deploy AI and machine learning in the next 12 months. However, many lack the necessary data foundation for successful implementation.
The shift from tax tacticians to strategists was also highlighted in the survey findings, indicating a decline in the number of tax leaders operating at a highly strategic level compared to the previous year. Matthew Becker, national managing principal of tax at BDO, emphasized the need for tax teams to evaluate their processes, technology, and communication with key organizational leaders to transition from tacticians to strategists effectively.
As the election draws near, tax leaders are bracing for potential policy changes that could have far-reaching implications for their organizations. Stay tuned for updates on how these developments unfold in the coming months.