What's Going On with the Bush Tax Cuts?

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Will Congress let the Bush tax cuts expire? Will the maximum rate on capital gain income increase to 20 percent? Will dividends be taxed at ordinary income tax rates? Will the ordinary income tax rate increase to 39.6 percent? Will the estate tax exemption go down while the estate tax rate increases? How big an impact do the autumn elections have on the decisions to let the Bush tax cuts expire?

The Bush tax cuts were enacted in 2001 and 2003 and were designed to expire in 2010, and then they were extended in 2010 for two years. Now the tax cuts are up for debate and possible renewal again, and I, for one, am pretty tired of this uncertainty about taxes. No matter where your ideology falls in the realm of higher or lower taxes for higher or lower wage earners, wouldn’t it be interesting if we had a tax system we could rely on from one year to the next?


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No kidding. It's like trying to pin Jell-O to a wall.

Business hates uncertainty. The lack of a long-term horizon is why we are getting no stimulus from the tax cuts, people make multiyear investments and have no idea what the future tax rates will be.

1. We can't rely on anything else. Why would we want to rely on the Tax System?
2. The Bush tax cuts were not "designed" to expire in 2010. That's the furthest that Bush and Cheney could push them. They would have had them last forever, if they could.