On Monday night, I hosted a discussion on City Visions on the impacts on California of the new federal tax law. You can listen to the audio, but here are some of my takeaways from our expert panel:

• The new law was mostly about making the U.S. corporate tax rate competitive with other countries through a massive cut. Nations are now apparently in a “race to the bottom” to keep corporate profits in-country by lowering their rates, and this bill only ups the ante.
• The corporate changes will likely face challenges under World Trade Organization provisions.
• Many of the individual tax benefits are temporary and set to expire in the coming years.
• High cost “blue state” efforts to blunt the impact to their taxpayers from the loss of state and local tax exemptions are unlikely to be viable in the long run. Whether states set up a charitable fund for people to pay state taxes (as California is seriously contemplating) or shift income taxes to employers (as New York is investigating), the IRS and/or Congress is likely to challenge these arrangements, creating uncertainty going forward that most taxpayers won’t want to bear.
• In the long run, the best way for states to minimize the impacts of the bill on their taxpayers is through new federal legislation.
• The bill is incredibly complex, and because Republicans never held a single hearing on it, it’s riddled with errors and oversights that will need to be corrected.
• Some taxpayers will be in for a big shock, such as those who recently got divorced and were planning to deduct alimony payments but can now no longer do so. Overall, most people have no idea at this point how the law will affect them.

Ultimately, this is a good time to be a CPA, as Californians (and most Americans) will be sifting through the changes in this law for months — if not years — to come.