When I want to know what is happening behind the political rhetoric in Washington DC, I turn to Dean Zerbe aka The Dean of Tax. This former Tax Counsel and Sr. Counsel for the Senate Finance Committee (and now the National Managing Director of The alliantgroup) writes a blog that is picked up by Forbes and his recent post was very insightful about what is happening with the debt talks and what impact these may have on small business. Here is the entire post with permission:
As we head into the final turn of the debt discussion – while there is uncertainty about the final result (and when that result will take place) – there is growing clarity on the issue of taxes. What is the clarity on taxes? There will be no increase of taxes above current tax policy as part of the debt deal.
Despite abuse from much of the press, demands from the administration and the threat of withholding cocktail party invitations from the chattering classes in Georgetown — the House Republicans have shocked Washington by ultimately holding firm against any tax increase above current tax policy as part of the debt ceiling.
Why do I say current tax policy? Because there has been a significant amount of hide-the-ball in discussions of tax policy with some – the Six Senators Proposal comes to mind — with discussions of a tax cut but within the framework of current tax law. Recall that under current tax law almost all the Bush/Obama tax cuts expire (yes, Obama added a fair amount to the Bush tax cuts when he came into office). So the proposals of cutting taxes from current law means in reality a result of hundreds of billions of dollars in tax increases over what individuals and businesses are paying today – current tax policy. I don’t know why people don’t trust Washington.