Tax Cut Implications from Capitol Hill | AccountingWEB

Tax Cut Implications from Capitol Hill

The fight is on (again) in Washington, D.C. as Republicans rally to invoke a 10-year, $182 billion tax cut.

Among the issues addressed is the often-discussed Internet tax, a tax on goods and services sold over the 'Net. Ever since last year when Treasury Secretary Lawrence Summers became vocal about not implementing such a tax, tongues have wagged far and wide, both in defense and in favor of the tax.

In favor, of course, are the "brick & mortar" stores who are discovering the power of e-Commerce.

Summers was vocal again recently when he suggested that the Clinton administration believes it would be better to adopt more modest tax breaks included in the budget, but how does this affect the economy?

GOP tax cuts, Summers says, would increase consumer spending while the economy is at a high; that's the time when the Federal Reserve begins noticing spending and could implement hikes in interest rates to curb inflation.

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