Congress will need to address tax policy issues relating to the years 2012 and 2013 before the end of the year. Absent any further legislation, a wide range of tax changes will take place on January 1, 2013. The issues at stake include tax rates, the alternative minimum tax, whether itemized deductions and personal exemptions should be limited, and whether some tax breaks that have already expired or that will expire this year are to be renewed for 2013. Kelley Phillips Erb has summarized the tax increases planned for 2013. Along the same lines but with more detail, tax publisher CCH has released a tax briefing on the topic of "2012 Post-Election Tax Policy" (pdf).
Barack Obama's first speech after being re-elected President of the United States addressed the budget and tax issues currently facing the nation:
"And let me make one final point that every American needs to hear. Right now, if Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will automatically go up on January 1st -- everybody's -- including the 98 percent of Americans who make less than $250,000 a year. And that makes no sense. It would be bad for the economy and would hit families that are already struggling to make ends meet.
"Now, fortunately, we shouldn't need long negotiations or drama to solve that part of the problem. While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody -- not Republicans, not Democrats -- want taxes to go up for folks making under $250,000 a year. So let's not wait. Even as we're negotiating a broader deficit reduction package, let's extend the middle-class tax cuts right now."
Remarks by the President on November 9, 2012
In the meantime House Speaker John Boehner also addressed tax issues after the election. The Speaker said, "Mr. President, the Republican majority in the House of Representatives stands ready to work with you to do what's best for our country." And he added, "Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform."
There are two significant tax bills already pending before Congress: S. 3412 and H.R. 8, which are summarized and compared in an earlier post. One of these bills may form the foundation for a tax package passed later this year.
But to pass legislation before the end of the year, Congress will need to work fast, as the House of Representatives plans to work about eight days in November and another eight days in December, reports Kay Bell over at Don't Mess With Taxes. "What that means for you and me," Ms. Bell observes, "is that there is precious little time for legislation to keep the economy from falling off the fiscal cliff." (Side note: the phrase "fiscal cliff" first appeared in 1987, according to the lexicographers at the Oxford Dictionaries.)