I am writing this article just minutes before the August 21, 2017 eclipse. The city is in a massive frenzy over the moon and the sun. I wish they were in frenzy for the Son. Preaching falls on deaf ears but the end of time is more significant than anything else in this world. The question we must consider is, “Will we be ready for that day?” But life goes on and many are oblivious to the most important things. We are more interested in what is happening or not happening in Washington.
What about the tax structure of the county. According to Anna Edgerton, writing for Tax Pro Today, there is a major struggle in Congress to pass a “major tax overhaul” that will not increase the federal deficit. To accomplish such, there would be long-term tax adjustments and short-term revisions and temporary rate cuts for individual filers and business filers.
“Mixing and matching proposals—making some permanent and others temporary—could be a potential work- around for GOP leaders who want to use a budgetary process known as reconciliation to prevent Senate Democrats from blocking tax legislation.” If that action is taken, that would limit the scope of the overall bill and adjustments would be necessary for any change in law that adds to the nation’s deficit. Short term adjustments in tax law; usually result in post benefit reclamation to off-set any increases in the deficit.
The tax laws under consideration “places a priority on permanence,” but some have shown receptiveness to shorter-term changes. Treasury Secretary Steven Mnuchin is quoted as saying, “Permanent is better than temporary, and temporary is better than nothing.” How true! The problem is not a new one. We, the people, feel tax burdens disproportional by reason of our own taxable income streams. It is therefore, almost impossible to please everyone.
While there is a plethora of activity and an abundance of comments, if we cut to the chase, a one-page outline of a tax plan that the White House released in April suggested cutting the corporate tax rate to 15 percent—down from the current 35 percent. It also would condense the existing seven individual income tax rates to three, cut the top rate to 35 percent from the current 39.6 percent and double the standard deduction. Overall, the plan might cost as much as $5 trillion over 10 years, according to an estimate from the nonpartisan Committee for a Responsible Federal Budget. Of course, Administration Officials dispute that number and the effect of the reduced tax base. What must happen is a balancing of tax reduction for taxpayers (corporate and individual) coupled with adjustments in spending at the national level. However, since the borrowing limit and the national budget seem to be expanding annually, that may thwart and plan to reduce the tax burden on taxpayers in all levels of taxation. The President emphasizes the middle class tax cut. Promises made in the campaign places extreme pressure to deliver. The nation is stunned that the ACA (Obama Care) fight has screeched to a sudden stop. Temporary tax cuts could be extended. In 2010, President Obama extended temporary tax cuts enacted under former President George W. Bush. Stay tuned. Change is coming.
I have no idea what will result from the rhetoric in Congress. Each Party seems to be deadlocked on their own agenda. Why can’t we just get along? Ask your Congressional representative. Send emails, letters or call them. What is best for one is not necessarily good for all, but what is good for all is best for each one of us.
For more information, call Wilson & Wilson, PC, CPA, CFE at 615-673-1330 or email jim@ wilsonandwilsoncpa.com