As expected Congress sent a tax bill to the President that leaves the Bush tax cuts in place for another two years. This is good news if for no other reason it allows tax planners to forecast the tax costs of business plans for the near term.
I expect many business owners and advisors are as frustrated as I am that there is no clear tax policy coming out of Washington. Democrats, licking their wounds from November, followed a "lame duck" course of action and did the only sensible thing, which was essentially...nothing. I know, I know. "Doing nothing" would have meant the tax cuts would have expired.
That wasn't going to happen. On his worst day Chuck Rangle wasn't delusional enough to propose across the board tax hikes in the middle of a recession without realizing he'd be sticking a political gun in his mouth. The only real effect November had on this debate was that it stripped the Democrats of the political capital they needed to increase rates on incomes over $250,000.
Small business owners will be interested in the following provisions of the bill that is expected to be signed by the President shortly.
That's it. Pretty much everything else is an extension of the rules were were dealing with in 2010. Most important we will have the same tax rate structure and continuation of the 15% capital gains rate, at least for two more years.