.......but that's a mixed blessing.
With the election behind it, the 112th Congress has a couple of months during the lame duck session to turn its attention to pressing fiscal issues. Large changes to both taxes and spending are scheduled to take place at the end of the year unless Congress acts.[1] On the tax side, the biggest potential change is the expiration of all Bush-era and Obama tax cuts.
Additionally, the Alternative Minimum Tax (AMT) has yet to be patched for the current tax year, let alone next. Congress could pass a retroactive patch (which it has done in the past) that would apply to the current year as well as next year; however, if it does not, the AMT exemption level would revert to what it was twelve years ago, and certain credits (such as the Child Tax Credit) would no longer be allowed against AMT liability. If this were to happen, millions of middle-class taxpayers could see a substantial tax increase, which for some could be even larger than the change from the end of the Bush-era tax cuts.
Finally, the 2% temporary cut to employee-side social security payroll taxes is also scheduled to expire at the end of this year—a potential third tax increase that would affect the vast majority of taxpayers.
And this does not include non-payroll taxes.
So, buckle up. It could be a bad time, tax wise. The only positive aspect of this is the irony that the top 5 states went for the Democrats.
