Tax reform is a subject that is often talked about but not easily embraced by legislators and politicians. Dean Zerbe, National Managing Director of Alliant Group and former U.S. Senate Finance Committee Senior Tax Counsel has stated that Republicans and Democrats alike will include tax reform debates throughout the election cycle, and then the topic will be set aside once again. In 2012, it’s likely the only tax item that will be addressed is the extension of the payroll tax for the rest of the year. Alliant Group anticipates that Republicans in the House are attempting to slow the spending train by requiring that other budget items are reduced to offset the cost of the payroll tax reduction. This effort will be avoided by the tendency to wait until the last possible minute to address issues. Alliant Group will continue to leverage our DC network to keep tabs on tax reform issues happening on Capitol Hill.
One discussion that has not received a lot of air time is the “Carried Interest” changes as the partial offset for the payroll tax. Alliant Group has watched as the recent debates about the very wealthy paying only 15 percent of their incomes in tax have energized this debate. More discussions are on the horizon about the millionaire tax, which Alliant Group knows Democrats support and Republicans oppose. Everyone, including Alliant Group, wonders how this debate would be conducted if Congress applied that millionaire tax to its members. As the dance continues about the millionaire’s tax, nothing happens to address carried interest.
Alliant Group continues to lobby Congress for business tax extensions to be included with the payroll tax extension. Alliant Group believes this action will be delayed until the 2012 winners are known. Congress tends to need a dramatic deadline to come to any sort of agreement. Alliant Group’s Dean Zerbe believes little of significance will happen for tax reform until after November’s election. Decisions pertaining to the extension of the Bush/Obama tax provisions will be delayed as well.
In the meantime, Alliant Group continues the pursuit to assist as many businesses across the country with finding every possible R&D activity to qualify for tax credits. The work Alliant Group’s team of experts do on a daily basis to help businesses from overpaying taxes is adding to the strength of our economy and keeping jobs in this country. Let Alliant Group assist your business – we can start with a no-obligation assessment to see if your business will qualify.