During his bid to become president last year, Donald Trump launched his ambitious tax reforms that would attract more businesses to relocate to the United States. They involved repealing swathes of regulations that prohibited companies from making substantial profits and caused them to move to other countries like China, where they can employ workers at a cheaper rate. This would result in 75 per cent of current regulations being repealed.

The President is very fortunate to be running America at a time when one million new jobs have been created. It is clear that there is an appetite in the United States for a radical overhaul of the tax system if it results in its economy reaching pre-2008 prosperity levels. But President Trump has many obstacles he needs to overcome if he wants his ambitious tax agenda to succeed.

The failure to repeal Obamacare should be a lesson

He needs to ensure Senate Majority Leader Mitch McConnell is on his side.

The failure to repeal Obamacare should be a lesson for the President that, even if he views his Republican colleagues as 'part of the swamp', he still needs their support to vote for his plans when they return after the summer recess. Politics is not like business, so he needs more patience.

Equally, the 2018 midterm elections might provide the President and the nation with a fresh opportunity to elect Republican politicians more aligned to his way of thinking.

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Donald Trump

Senator McConnell said he plans to push through tax reforms using reconciliation, whereby the GOP requires 51 votes to pass legislation because it does not have 60 out of the Senate's 100 seats. If they perform well in next year's elections, it may be even easier for the President to legislate his plans. 2018 could be a turning point for him.

President Trump intends to lift the debt ceiling. There are many fiscal conservatives who would support this, but how many Democrats are likely to help?

The Republicans may have to approach opposition members who are sympathetic to their aims, as opposed to those who would fight to protect programs like Medicaid.

The President faces a huge challenge

Both the GOP and the Democrats have insisted that if the President intends to implement tax cuts, he must ensure that they are paid for. This can be achieved through a significant rewriting of the US tax code.

This means they would have to close loopholes and deductions. As mentioned earlier, President Trump would need to persuade Congress to support enormous spending cuts which many of them are divided on. Senator McConnell said tax cuts would be revenue neutral, but he was not transparent in his indication as to which programs would have their funding slashed.

The President faces a huge challenge, but if his team advises him properly, he may achieve the most daring reform of the tax system in recent years and help make America great again.

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