I’ve got mixed emotions about the new bi-partisan tax reform bill introduced by Senators Ron Wyden (D-Ore.) and Judd Gregg (R-NH) this week. On one hand I’m happy to see tax is on the minds of our Congressmen, on the other, I’m not sure the current efforts are focused on the right tax at the right time.
Its tax season and that means tax is on the minds of many Americans, not just those of us who have made careers in the field. That would suggest that debuting a new tax reform bill may be perfectly timed to get voters on board with an allegedly simplified income tax structure with fewer tax brackets, a higher standard deduction, eliminating the alternative minimum tax, and creating a flat business tax rate. It may very well be time to revisit the Tax Code and make some changes because the last time a major overhaul occurred was in 1986 under the Reagan administration.
So why do I have mixed emotions? Like the reform proposal claims to be, it’s simple; the wrong tax at the wrong time.
First, its nearly March and no attention has been given to the estate tax laws which were repealed as of the first of the year because no action was taken by Congress. As I’ve written in previous posts, estate plans of many Americans may be adversely affected without the estate tax because they were written based on the assumption that the law would remain in some form, even if the rates and exclusions were altered. If there are tax discussions in Congress right now I think the estate tax deserves to be front and center. What it constitutes; a freeze at 2009 levels, a complete repeal, some other rules? At this point I’d take any form of certainty over its current state.
Second, this is an election year for many members of Congress and that spells trouble for this type of legislation. It’s true that many Americans are fed up with partisan politics in Washington and they may be happy to see that some of their elected officials are reaching out to each other in the interest of their constituents, but it won’t get the necessary time or votes it needs to pass. That’s right, there are too many other pressing issues, such as health care reform, to get time on the floor for discussion. Plus, there will be too many Congressmen posturing to differentiate themselves in an election year to actually garner the necessary votes to pass this type of sweeping legislation.
So “attaboy” Congress, but please don’t take your eye off the ball!
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