Q. With all that is going on in Washington, do you think we will see any big tax changes this year?
A. Despite the noise and the rhetoric, Congress remains a long way from enacting any tax legislation, let alone major tax reform legislation in the current year. In the unlikely event that such a process began tomorrow, Congress will likely choose to affect future tax years so there should be no impact on tax year 2011 and possibly a limited impact on 2012. The law enacted last December that extended the existing tax rates through 2012, remains in effect, with some tax credits and expiring provisions terminating at the end of 2011 and the rest at the end of 2012. Many tax credits and expiring provisions face an uncertain future going into 2013.
The weakened economy and the need for rebalancing of federal spending would indicate a need to shift both spending and tax revenues to expand economic activity and increase employment. We are closely monitoring congressional actions and stand ready (via webcasts and our blog) to get you the information and analysis you need as events warrant.
