Congress Poised to Make Changes Impacting Your Finances by End of Year
President Obama has signed the Budget Control Act. This law raises the debt limit and creates a bipartisan, joint select committee to address reducing the deficit. Now that the committee members have been selected, they will begin to make recommendations on how to improve the nation’s balance sheet. There are a number of potential outcomes that may impact your finances, perhaps originating from:
Obama Administration Proposals
President Obama has insisted that any deficit-reduction plan must include revenue increases in addition to spending cuts. The president has proposed extending the Bush-era tax cuts for lower and middle income taxpayers beyond 2012, but would allow them to expire for higher income individuals. In addition, the administration recommends eliminating some corporate tax preferences.
Gang of Six Tax Proposals
This bipartisan group of senators came together earlier in the year to devise a plan to reduce the budget deficit by $3.7 trillion over 10 years. The plan framework includes many suggested changes for the tax code, including three new individual tax brackets, abolishing the alternative minimum tax, and adopting a single corporate income tax rate.
House Republican Study Committee
A committee of 175 conservative House members drafted the deficit reduction proposal, which became the Cut, Cap and Balance Act. This legislation didn’t include tax increases. It passed the House on July 19, but failed to pass in the Senate.
White House Deficit Commission
This bipartisan, 18-member commission developed a six-part plan to reduce the federal deficit nearly $4 trillion by 2020. The plan called for discretionary and mandatory federal spending cuts. The commission also recommended significant tax reform that would change individual and corporate income tax rates.
Tax Writing Committees
The Senate Finance Committee and the House Ways and Means Committee have explored a variety of issues related to corporate and individual taxation.
Read more about the Budget Control Act of 2011.
If you would like more details about this Act or our tax services, please contact your Brown Smith Wallace tax advisor at 314.983.1200 or Cathy Goldsticker, CPA, at 314.983.1274, firstname.lastname@example.org.