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Fiscal Cliff Prelude

As we approach the so-called fiscal cliff, here are some helpful resources for your information:

From the Tax Prof Blog: 

"Tax Foundation, The Fiscal Cliff: A Primer:

The fiscal cliff is the culmination of a decade of “temporary” tax and budget bills that have postponed resolution of key policy differences. Should the tax code be used to heavily promote income distribution or aim instead to raise revenue in the least distortive manner possible? How large should federal spending be? Should PPACA be modified or repealed? Should there be a federal estate tax and if so, at what level? Should the payroll tax be reduced and if so, how should we fund Social Security and Medicare? What should Social Security, Medicare, and Medicaid look like as the population ages?

While most observers recognize the importance of dealing with the fiscal cliff before it happens, the divided political landscape can encourage brinksmanship to improve negotiating positions. No political actor wants the fiscal cliff to take permanent effect in full; the next few months will determine whether that happens anyways despite those intentions. Table 1 ... illustrates the revenue impact of the fiscal cliff provisions. ...

In 2001 and 2003, President George W. Bush signed into law significant tax reductions for nearly all taxpayers. These cuts included marginal rate reductions, the introduction of a new 10% tax bracket, an expansion of the child tax credit, and a variety of other provisions (see Table 2 for complete list). ...

The sheer size of the fiscal cliff in scope, importance, and dollars signifies the uncertainty faced by American taxpayers. With so much of the tax and budget system on short-term lease, and with the proposed permanent fixes so widely varying, speedy economic growth becomes untenable. While past practice suggests Washington will once again duct tape together another short-term extension and put off the hard choices, anything can happen "

General Explanation of Administration's FY 2013 Revenue Proposals. This is where details can be found in a 215 page "Green Book": http://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2013.pdf

President's Framework For Business Tax Reform: Details on Admin's latest business tax proposals.  http://www.treasury.gov/resource-center/tax-policy/Documents/The-Presidents-Framework-for-Business-Tax-Reform-02-22-2012.pdf

This is just a starting point. Where this process ends up is impossible to predict at this time. Stay tuned.





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