On August 10, 2010, Pres. Obama signed into law $26 billion of new spending for education and Medicaid assistance to the States, H.R. 1586. According to the New York Times, the US Senate was in such a hurry to get to their summer vacation when they passed the bill on August 5th that the Senate failed to even put a name to the bill. The US House was already on vacation and came back for one day on August 10th to pass this nameless bill. The cost of the bill was "paid for" by enacting $9.0 billion of tax increases "reforming" international taxation (details beyond the scope of this blog), saving $1.1 billion by ending the advance earned income credit used by low-income individuals (which appears to be a one-time accounting gimmick), by cutting food stamp money by $11.9 billion beginning on March 31,2014 (which cuts may never really happen), and by making cuts in "budgetary authority" to programs that cannot spend their allocated funds fast enough before the programs expire.
Congress has left for another day the very important work in considering the following tax matters:
- The estate tax whipsaw in 2010 and 2011,
- Extending income tax provisions that expired at the end of 2009, such as the research and experimental credit, sales tax deduction, etc.
- Dealing with the Bush-era tax cuts that expire on December 31, 2010 resulting in large income tax increases beginning January 1, 2011, and
- Patching the alternative minimum tax exemption amount for 2010 so that 22 million more middle-class taxpayers don't fall into the AMT trap.
I expect that a lot of tax law changes will occur this Fall. But again, with this Congress, maybe not.
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