November is quickly approaching and we are approaching Election Day as citizens will have an opportunity to vote on their presidential choice.
The election will ultimately play a big role in our economic policy and we are nearing what Fed Chairman Ben Bernanke has deemed the “fiscal cliff.” On December 31st many tax rate reductions and other cuts expire. It is unlikely that that action will be taken by Congress in the latter half of 2012.
Many potential issues could arise from allowing the cuts to expire including a lack of production/investment from companies resulting in fewer jobs. Fewer jobs will increase the unemployment rate which will send the media into overdrive and put even more pressure on the President and Congress come January 1, 2013.
However, if the cuts do expire, obviously revenue would increase for the government and hypothetically speaking, truly hypothetically, the government could utilize increased revenue sources to balance a budget or to fund other programs that could result in new jobs.
It seems as though it would be wise for our economic leaders to find a solution to the tax and spending issue to provide stability for our business leaders resulting in more investment into people, technology, research and development, and hopefully stimulating growth in our economy. Without a clear vision from our government businesses, especially small business, will remain on the sideline and it will be difficult to achieve financial success.
What do you think the government will do with the expiring cuts? If you could be a congressman for a day, what would you suggest?
Despite what may come in November, we are here to help and want to help you reach your financial goals. Stop on into Liberty Tax and see how we can help you.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.