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Tax cuts smackdown!

September 12, 2010

While Representatives and Senators have been out on recess working in their home districts this month, the battle over the extension, or not, of Dubya’s tax cuts has been fought mostly in the media.

Ultimate Fighting Championship (UFC) fighter Ross “The Real Deal” Pearson from England (R), fights with Brazil’s Edson Barbosa during the UFC Rio, a professional mixed martial arts (MMA) competition in Rio de Janeiro August 27, 2011. REUTERS/Ricardo Moraes (BRAZIL – Tags: SPORT)

It’s been a give and take struggle, much of it choreographed a la professional wrestling.

Much of the fighting has been among Democrats. No surprise there.

The party in charge (for now) is divided over just how much of the tax cuts to continue.

And the rift isn’t confined to the legislative branch.

The White House was blindsided when its former budget director Peter Orszag  announced via his first New York Times column that he was for keeping, at least temporarily, all the current tax cuts, even for the richest Americans.

Then the Congressional momentum shifted to extending all the cuts at all individual income levels when a key Senate Democrat voiced support for that approach.

The prez offered an olive branch of sorts, pushing for extension and expansion of business tax breaks.

Some pundits and politicians tossed the idea of a payroll tax cut into the mix. The White House was not impressed.

The V word, veto, was even bandied about. But Obama stopped just short of saying he would nix any bill that continued lower tax rates for high-income individuals.

GOP tax fracture? Republicans, who’ve always been better than the disorganized Democrats at presenting a consistent message, kept the push on during the Congressional break for all tax cuts for all taxpayers.

But now, it looks like there might be a small fracture in the GOP, and from one of the top guys no less.

This morning on CBS’ Face the Nation, House Minority Leader John Boehner (R-Ohio) said that while he wants the tax cuts extended to all, if Obama and Congressional Democrats push through their plan, the Republican leader would vote for it.

“If the only option I have is to vote for those at $250,000 and below, of course I’m going to do that,” Boehner said.

Is the battle over the current Bush tax cuts over? Not by a long shot.

But maybe, with election day nearing, some lawmakers are starting to do some serious weighing of what their tax action or inaction might mean on Nov. 2.

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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.)

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