The Congressional Budget Office released a warning yesterday that if Congress fails to act on the impending tax hikes schedule for January 1, 2013, also known as “Taxmageddon,” the country will experience a deeper recession. Douglas Elmendorf, director of the CBO said, “The magnitude of the slowdown we’re discussing next years is significant.”
The tax hikes are a return to the rates prior to the Bush era tax cuts. These tax hikes involve income tax increases, as well as estate tax increases. But on top of that are the tax increases contained in Obamacare, recently upheld as constitutional. There are numerous payroll tax increases, capital gains tax rate hike and new taxes on investment returns. So it’s not just the expiration of the Bush tax cuts, but the implementation of the Obama Tax Hike.
The current political environment isn’t helping and it’s doubtful that Congress will pull their head out of the proverbial Capitol sand to do anything that would avoid harming theUSeconomy further. On top of this dilemma is the president’s insistence that taxpayers earning more than $250,000 should pay their fair share. Really?? As though their not carrying the burden of tax payments now??
The bottom line is this, if you’re a small business owner or entrepreneur you have to act regardless of Congress’ failure and the president’s failure to act. There are proactive tax strategies that can be implemented to save you and your business money. Don’t be like Congress or the president, act.
Jeffrey A. Field is a lawyer, Certified Financial Planner® and Certified Tax Coach® that focuses his practice on helping small businesses, entrepreneurs, and families grow their business, generate and enjoy their wealth and pass it on and protect it for future generations. Contact him at 818.369.7900 for further