Monday, November 8, 2010, AM | 7 Comments
Oliver Wendell Holmes (March 8, 1841 – March 6, 1935), former Justice of the United States Supreme Court, said, “Taxes are what we pay for a civilized society.” Now that the midterm elections are over, soon Congress would be in session. I saw a bumper sticker that said “Bush tax cuts: Keep ’em or kill ’em.” Well, if Congress did not do anything and it seems it would not, the tax cut of 2001 would be killed by default, come January 2011. Which would mean your paycheck may shrink next year.
As we all know, the debate between the Administration and Congress has been going on for some time. The President says tax cut can continue for folks who make less than $250,000 and those who make more will pay higher taxes. Recently, because of the Republican victory resulting in majority in Congress, the President said he is looking for a compromise.
Time is not in anyone’s control. Thank God for that. It does not yield to the bickering Congress which has not enough time left, less than 2 months. It must act quickly. If it does not, it will show to the world that it has wasted a good opportunity for the nation. According to some estimates, that’s a $4 trillion debate which seems to keep on forever.
Congress has reduced itself to a bumper sticker
Many books and numerous articles have been written about one sentence: “Congress should sit down and do a thoughtful discussion” or something to that effect. What it has historically done is, except may be a few instances, debate a topic and debate it so much that it kills the whole purpose of why they were elected in the first place.
Before the mid-term elections, many folks already knew that Congress was not going to do anything about the tax rates that was put in its plate. And now it is getting late and late by the day.
Congress ought to break the tax code
Many tax specialists and tax lawyers say the United States tax code barely reflects the most powerful economy in the 21st Century World. Congress must try to break the U.S. Tax Code.
The American people have the right to get a fair-for-all tax code. What Congress has done so far is enact changes that have been accommodated by piece-meal patches and tweaks. That has created an ever-growing list of tax breaks and loopholes. The loopholes are costing the Treasury that presently totals $1 trillion a year and that is no small change. By the way, trillion is spelled with a “T” not a “B”.
Some major issues Congress has on its plate
There are two major deductions for taxes. One is for deductions for businesses’ health care expenses, and the other for individuals’ home mortgage interest. Some questions to ask and think about:
Health care expenses
Employers’ health care insurance ought to be the cornerstone of the new health care plan. Congress must find the best way to encourage a business to continue to provide protection to employees.
Home mortgage interest
The incentive for mortgage interest deductions has caused millions to foreclose and go under. Millions overextended and borrowed beyond their means. Should it be addressed and made changes in the law so that the lenders are more careful in lending and avoid the eventual foreclosure at the very beginning of the whole process?
In a Nutshell
Of course, the options are blurred by the fragile economy, especially when the tax rates – if Congress doesn’t do anything – would explode on Jan. 1, 2011. The Congress and the Administration ought to put their heads together and come up with a plan that is in the best interest of the American people – individual and corporate, both.
- Nov 8, 2010: World Spinner