Tuesday, August 19, 2008

The Upcoming Presidential Election and Taxes

As a business owner, I rarely discuss politics in most business situations.

However, the upcoming election and how it will impact the future of our tax code is one topic that requires a political discussion...

In the current state of the IRS Tax Code, there exists a unique situation that will provide a great deal of power to the sitting President in 2010. Currently, many areas of the code have built-in "Sunset Provisions" which mean that they are set to expire in 2010. Some areas that will be affected include:

Estate Tax
The "Marriage Penalty"
Retirement Plan Contributions
Tax Credits Relating to Children
College Tuition Credits/Deductions
Capital Gains Tax Rates
Various Other Items

With a democratic president in office come 2010, it is assumed that any current benefits set to expire in 2010 will either remain expired or be brought back on a smaller scale, providing less of a benefit. Similarly, any current taxes that are set to expire or reduce in 2010 will be reinstated and possibly even raised.

With a republican president in office come 2010, the opposite assumption holds true.

Whoever holds office in 2010 will have the unique opportunity to shape the future of the tax code. This is a very strong power that should be weighed heavily by voters when they decide who to pull the lever for in November.


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