The current income tax rates are temporary and will increase on January 1, 2013.  Both parties want to extend some portions of the present taxes but cannot agree on it.  Republicans want to extend as is and Democrats want to increase top tax rates.  Big business is hesitant to expand because they can not make plans in this uncertain climate.

I do not think that small changes to the tax code will make much difference.  I would give on the top tax rates to previous values if we could do away with the inheritance tax.  The last year of the Bush tax cuts did this but it came back last year when the cuts were exended.  The inheritance tax hurts small business.  Frequently they will have to sell the business to pay the taxes.  Some companies carry life insurance on the owner so they can pay the inheritance tax and keep the business.  This is a cost which is recovered in higher prices for the product of the business.

Our business taxes are among the highest in the world but many exemptions exist.  Every one wants to reduce these taxes  and exemptions but no one can agree on who will lose their exemptions.  Overall reductions are needed to boost American business and create jobs.

5 thoughts on “Taxes

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