Looking Over The Fiscal Cliff...

December 6, 2012

The dust from the election has settled. We’re all aware of the fiscal cliff. So now what?

The President and Congress can’t seem to agree on the best course of action for moving forward, however, they seem to agree that something has to be done.

We are seeing a number of ideas that are being proposed to deal with the expiration of the Bush-era tax cuts and the budget deficit. Some would like to keep tax rates the same or reduce individual rates and limit existing tax deductions to create a broader tax base; while others would like to raise taxes by targeting the higher income earners. Most recently, the consensus seems to be that there will be some form of compromise in Washington.

Some of the ideas to fix the budget deficit are to look closely at the tax expenditures by reducing, limiting or eliminating such benefits. The popular tax deductions that are being reviewed by policy makers include home mortgage interest, charitable contributions, retirement plan contributions, and employer healthcare contributions.1

Nevertheless, it is anyone's guess as to what will happen. Advanced Marketing will continue our efforts to provide you with timely updates as we see more developments in Washington.

White House, Office of Management and Budget. Table 17-1. ESTIMATES OF TOTAL INCOME TAX EXPENDITURES FOR FISCAL YEARS 2011-2017

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