December 4, 2006

OH, THERE'LL BE BIG CHANGES...:

No immediate tax hikes expected (PAMELA YIP, 12/04/06, The Dallas Morning News)

Looming over any plan of action is the fact that Democrats will take control of Congress next year. For some, that has sparked the fear of higher taxes.

But many experts don't expect big changes at the outset.

"I don't see any change in individual income tax policy," Michael Townsend, vice president of public policy at Charles Schwab & Co. "I don't think the Democrats will be able to take that on in a presidential election cycle."

Generally speaking, experts say you should carry on with your tax planning and not worry about what legislation may or may not happen in the future. That means accelerating your deductions so you can take them this year and delaying your income so you don't have to pay taxes on it till next year. Complicating that process is the dreaded alternative minimum tax (AMT), which ensnares more taxpayers every year.


In fact, the delicious irony is that the next Congress will likely cut, not raise, taxes. Democrats can't get a hike past a veto and not only do they need to pass AMT relief they'll have to give the President some of the breaks he wants as part of the deal.

Posted by Orrin Judd at December 4, 2006 5:47 PM
Comments

We'll see. The GOP and Bush seem to be suffering from post-election shock and are hiding in the background as the Dems take the reins. The fact that they wouldn't put up a fight for Bolton is not a good sigh.

Posted by: AWW at December 4, 2006 8:28 PM

That's absurd. They couldn't confirm Bolton when they had control. How would they without? The Capital isn't Masada, much as the far Right wishes it were.

Posted by: oj at December 4, 2006 8:31 PM

The atricle is correct about the timing - raising taxes going into a Presidential election would be deadly for the Dems. And 2008 will be a bad year for them anyway, because in all likelihood the GOP candidate will endorse full (permanent) acceptance of the tax cuts from 2001 and 2003, forcing the Democratic candidate to either do the same or endorse a massive tax increase.

But watch the Democrats try to hide behind Robert Rubin, who no doubt will declare that taxes must be raised in order to strengthen the dollar. What that will do to some traditional Democratic constituencies will not be discussed. Although I imagine some Democrats will have to explain why they want to 'weaken' the euro. :>)

Posted by: jim hamlen at December 4, 2006 11:13 PM
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