Thursday, December 20, 2012
How bad do you need your 2012 tax returns next year? Well, if you can't file them until late March 2013, then you stand a good chance that you will not get your return until late spring or summer. Is that crazy or what! The fact is that this is absolutely the case if a fiscal cliff deal does not take place by December 31, 2012. The IRS would be severely limited on their activities and the refund program will suffer in result of no tax decision by the end of the year. Also, income exemption levels under the "wealth tax" - as the AMT is known -- were never adjusted for inflation since it was enacted decades ago. So Congress has regularly passed an AMT "patch" to correct for that by raising the exemption levels. The tax season begins in two weeks. Even though inflation has gone up in 2012, exemption levels will not rise if the fiscal cliff issue is not resolved within two weeks, which means guaranteed more taxes for everyone.
Enough is enough. Keep it up Congress, as you are doing a great job in failing the American people. If year end goes by without tax cuts put into play, then the next thing to look for is going from a 'AA+' rating to 'AA'. This would be catastrophic to everyone."If the negotiations on the fiscal cliff and raising the debt ceiling extend into 2013 and appear likely to be prolonged with adverse implications for the economy and financial stability, the U.S. sovereign rating could be subject to review, potentially leading to a negative rating action," Fitch ratings agency said in a bi-annual report. Standard & Poor's cut its U.S. rating to AA+ in 2011, citing political brinkmanship that was preventing agreement on raising the debt ceiling -- without which the government can't pay its bills -- and a longer term plan to reduce borrowing. It warned earlier this year that a further downgrade was possible in the absence of a debt deal.
Congress continues in its lack of creating bills that would benefit everyone, but this latest failure would mean a disastrous end to the 2012 year. As everyone knows, the good and bad have shown themselves. President Obama was re-elected as President, and a city in Connecticut known as Newtown is the latest victim of a gun-slinger that killed 20 children at an elementary school. It sure would be great if Congress would just get something done to avert the tax issues and the remnants of failing to get it done by years end. Unfortunately, we the American people seem to be at our lawmakers mercy.