Tomy great surprise, and the surprise of most other tax bloggers and taxprofessionals, the House approved the Senate tax bill by a vote of 257-167 latelast night. The American Taxpayer ReliefAct of 2012 now goes to BO for signature.
OnceI have had time to “digest” all of its provisions I will post a detailedanalysis of how the Act will affect 2012 and 2013 (and beyond) 1040s, withappropriate commentary.
WhileI am glad that at least something has been done - we now know how to properlyprepare 2012 tax returns, and the correct 2013 withholding tables can now bepublished – I am somewhat saddened by the final result.
Itlooks to me that this Act, which makes most of the “Bush” tax cuts permanent, permanentlyextends the AMT “patch” retroactive to January 1, 2012, and extends therefundable credits through 2017, kills any hopes for a serious and substantiveoverhaul of the mucking fess that is the US Tax Code in 2013.
Itappears that now that this tax bill has been passed the idiots in Congress arenow finished with taxes for 2013. Thisincludes the Republicans -
“Nowthe focus turns to spending,” Republican House Speaker John Boehner said,promising that his party would “hold thepresident accountable for the balanced approach he promised, meaningsignificant spending cuts and reforms to the entitlement programs that aredriving our country deeper and deeper into debt.”
Yes,there needs to be a focus on cutting spending. But it should not be limited to reducing “entitlement programs”. There is so much waste and pork in anygovernment budget – and this needs to be seriously addressed. And there should also still be a focus on taxreform.
TheTax Reform Act of 1986 was passed because of Ronald Reagan’s commitment andleadership. BO and the Democrats are notcommitted to legitimate tax reform, and will not provide leadership.
Whilereviewing the results of a Google search of Fiscal Cliff news I came across thepost “'I Will Ask For More Tax Increases on the Rich Later,' Obama Promises” byRobert Lenzner at FORBES.COM.
“On the eve of the pathetically rotten ‘fiscalcliff’ deal, President Obama has promised to reform the tax code ‘so thatwealthy individuals, the largest corporations, can’t take advantage ofloopholes and deductions that aren’t available to the rest of America’.”
Soit appears BO equates “tax reform” with “taxing the wealthy”.
Actually,due to AGI phase-outs, wealthy individuals can’t take advantage of somedeductions and credits that are available to the rest of America.
BOand the Democrats want to continue to complicate the convoluted Tax Code with thebad tax policy of distributing social welfare and other benefits through theTax Code, instead of having these benefits distributed through “normal”channels via the budgets of the appropriate cabinet departments.
Thereis no tax reform in the compromise tax bill, other than BO-style reform (taxing the wealthy). And it adds more complexity to the Code with thereinstatement of PEP and Pease AGI-based reductions of itemized deductions and thepersonal exemption for the “wealthy”.
Iwill continue to speak out for a serious and substantive rewriting of the TaxCode, and hope that others will as well. But I am not hopeful that anything of value will be done to fix thebroken Code in 2013.
TTFN
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