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Deficit panel might pick tax amount, but let others figure out the details

November 14, 2011

Harry Truman is famous for, among other things, the sign on his desk proclaiming that "The Buck Stops Here."

Buck passing, not stopping, is an area in which Congress is expert. Witness the Bush era tax cuts, designed so that the creators of the tax breaks wouldn't have to deal with their expiration. That's OK. That tax buck was passed along at the end of 2010 for two more years, meaning that some new Representatives and Senators will have to deal with them.

Now we hear that the Joint Select Committee on Deficit Reduction might pass along some of the tax-writing tasks.

10 Days Super Committee Countdown"With a little over a week left to reach a deal, members of the Congressional deficit reduction panel are looking for an escape hatch that would let them strike an accord on revenue levels but delay until next year tough decisions about exactly how to raise taxes," reports the New York Times.

The super committee would do some work. Its 12 bipartisan members would come up with the amount of new revenue to be raised, says the Times, but would leave it to the Congressional tax-writing committees — Ways and Means in the House, Finance in the Senate — to hammer out the specifics.

Sen. Max Baucus (D-Mont.), chair of the Senate Finance Committee, and Rep. Dave Camp (R-Mich.), chair of the House Ways and Means Committee, are on the super committee. They reportedly have said they would welcome the chance to get their committees involved.

Of course they would. Both panels, especially the Ways and Means with its Constitutional authority to create any new tax laws, carefully guard their tax-writing powers.

Letter, but not spirit of the law: The "general now, specifics later" revenue raising approach technically would meet the requirements to avoid the automatic budget cuts, say the supporters.

It also would essentially give lawmakers more time to meet their $1.2 trillion deficit cutting goal, since the tax committees could work beyond the impending Nov. 23 deadline.

Well played, super committee, well played.

If the special committee can pull this off — and it's unclear whether Obama, who told the panel co-chairs last week that he won't stand for any gimmicks to avoid the hard decisions that if left unmade would prompt defense and entitlement program budget sequestration — it also means the process could be dragged well into 2012.

And that would make for an even more interesting election year.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Obama is doing great with his “no gimmicks” plan in my opinion. Especially where he tried to tax the upper class, which would include our congress, and they all said no. Now everyone can see in plain site, (even plainer than before), where our problem lies.

  • I wonder if the deficit panel will meet the deadline.

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