Monday, February 6, 2012

Bush Tax Cuts Appear to Becoming Permanent

Washington, DC is home to a powerful group of sycophantic cowards and with this being an election year we can expect even more cravenness than what we've become accustomed to.

Regardless of where one sits politically, it's terribly unsettling that something so important as tax policy can be shirked in such a brazen manner. Most mainstream commentators attribute the lack of action in creating a more permanent tax code to a lack of partisanship. The real problem, though, is a lack of purpose and internal fortitude on the part of those in Washington to a degree unseen before.

As a result of the weak willed personalities that make up the political class of our country, many aspects of public policy have been left unattended to, not because they are unknown but because no one is willing to take a stand in any direction for fear of having their stated opinions used as ammunition against them down the line in an election battle. Instead of actual decision making, we get grand sounding pronouncements that are full of sound and fury yet signifying nothing. Better to obfuscate and leave wiggle room than to put yourself out there to possibly be hung by your own words.

This is no more evident than in the current situation surrounding the current tax code. Congress has been aware of the sunsetting provisions within the Economic and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, otherwise known as the Bush Tax Cuts, since they were enacted, yet here we are two years out from the end of the most parts of these acts with no permanent solutions as to what to do. Instead of acting decisively, Washington continues to use Band-Aids.

Members of Congress continue to hedge their bets with conservatives not wanting to offend their base by coming out in favor of tax increases or cuts to Republican pet issues but scared to lose votes by cutting benefits like Medicare and Social Security. Liberals are afraid to act decisively to save many programs aimed at middle to lower class taxpayers or tax wealthier citizens lest they become targets of Tea Party or kindred activists while at the same time trying to convince Democrats that they 'care'.

2011 and 2012 are set for the most part, aside from some continuing haggling over the two percent reduction on the employee-side Social Security tax, but that only came as a result of a nearly literal last minute agreement at the end of 2010, which essentially extended the terms of the Bush Tax Cuts. Beyond 2012, things look just as they did in 2010. With this being a presidential election year, it wouldn't be surprising to see another rushed together tax bill in December.

What does this all mean? Well it means a number of things, but most importantly to our minds, is the lack of ability for taxpayers to plan their futures with any kind of certainty and it also means an increased amount of scrambling on the part of an overextended IRS to get their systems updated and their staff trained.

So with a government that prefers expediency and cover for their actions, it seems more and more likely that the Bush Tax Cuts are likely to become more or less permanent, although we will have to continue and wait every couple years to find out.





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