There has been much uncertainty surrounding the expiring Bush tax cuts and when (if ever!) Congress will vote on an extension. It appears that Senator Reid has confirmed no tax cut vote before November.
This issue has been “punted” for far too long now, and it’s inexcusable for Congress to force American families and small businesses into a period of even greater angst and uncertainty. According to the Wall Street Journal, “If returning lawmakers don't pass legislation by Dec. 31, the expiration date of the cuts, tax rates would rise not only on income, but also on estates, capital gains and dividends. Important corporate tax credits and relief from the Alternative Minimum Tax also are up for renewal.” As families struggle to budget and make ends meet, their financial planning will grow more complicated as they plot out possible tax liabilities in 2011. Moreover, the vote delay will cause ‘collective nervousness’ in the business world, according to Marc Zandi, chief economist of Moody’s Analytics, potentially leading employers to freeze hiring altogether – hardly a recipe for economic recovery.
And mark my words: if you think debate has been heated up to this point, just you wait. Passing contentious legislation in a lame duck is quite frightening given the ability for lawmakers to abuse the special session and essentially defy the wishes of the American people after they speak up on Election Day. Remember that these votes would occur after many Members are (likely) voted out on November 2.
Regardless of political retaliation, Congress needs to act NOW. A recent study showed that the middle fifth of American households face a nationwide average tax hike of $1,540 unless current laws are extended, potentially much higher. This is a reality we cannot afford for Congress to ignore any longer.
While the Senate has said they will not vote next week, there are reports that the House has not ruled it out. Call your Representative and tell them to act swiftly and extend the 2001 and 2003 tax cuts!
Here are a couple of great resources for you:
Ten Reasons to Extend Tax Relief and Stop Tax Hikes
More than 300 Economists Say to Congress: Support Extension of Lower Tax Rates!