Congress is going to have a handful of tax issues to consider when they return from summer recess, many of which will affect American businesses. According to Forbes.com, legislators will need to take on bills dealing with expiring tax cuts, tax relief for businesses, and energy laws likely to have significant tax implications.
The difficult part: Paying for it all. No member of Congress wants to be viewed as raising taxes in the weeks before Election Day. Much of the work can--and probably will--be done in the "lame-duck" session following the election, but the dynamics of such sessions are notoriously unpredictable. At the same time, lawmakers will be feeling pressure to trim the $1.4 trillion federal budget deficit. The president's Fiscal Commission suggesting steps to do this is due by Dec. 1.
Business is watching closely. Congress is also cooking up an alphabet soup of tax measures to offset some of the outlays, and how it turns out is anyone's guess.
"Everything that has been in any bill that has been passed by the House or Senate is fair game and is at high risk of being done," warns Clint Stretch, managing principal for tax policy in the Washington office of Deloitte Tax.
The most debated item is whether to extend the Bush tax cuts, which expire at the end of the year. The Obama administration has proposed keeping them in place for about 98% of all Americans, but letting the top marginal income tax rates rise for individuals earning more than $200,000 per year and couples who make more than $250,000. The top two rates would be 36% and 39.6%, up from 33% and 35%, respectively, at present.