Does any normal citizen understand what is going on with the tax and spending cuts that our representatives are discussing right now? Not really as most state representatives themselves do not understand what is going on. Several policy makers and statesmen commented on the impending deadline for the debt ceiling in August this past week. Why would they be commenting on something that is still several months away? Because the house and senate have already decided that there is not going to be an agreement until after the election.
What does this all mean?
Unfortunately the “Bush tax cuts” had to relapse on an election year and all of our representatives’ focus has now switched from doing their job to winning your votes in November.
According to Wikipedia sequestration refers to “an across the board spending reduction of non-exempt mandatory programs to offset this increase in the deficit” which is a legal way of saying that the representatives need to decide how much they are going to cut the social program to take down our federal deficit before they deal with tax changes. Some of those cuts affect low income taxpayers as much as high income taxpayers. All taxpayers would feel the tax increase if these cuts sunset. What is “fair share” is to be determined.
Is there any good news?
Many congressmen have stated that they do not support the sequester or the tax cuts and plan to have them extended as little as possible into 2013. The timing of the elections gives citizens a chance to decide who they think will handle these tremendous ordeals the best and who will keep the interest of the citizens in mind during the upcoming debates.
Lindemeyer CPA will be following these details as they unfold over the next few months. Contact us with questions you have or schedule a first consultation if you’re looking for a new accountant in Louisville.