World’s Foremost Authority: My Forecast of Tax Issues in 2012
January 20, 2012When I was a kid, one of my favorite comedians was Professor Irwin Corey, the self-proclaimed “World’s Foremost Authority.” The professor was not exactly a spring chicken when I used to watch him on the Ed Sullivan Show, and I’m sure he must have passed away years ago, but – like everything these days – he lives eternally on the Internet with a Web site devoted to his some of his funniest bits. At the risk of sounding a bit like Professor Corey, I’m going go out on a limb and give my authoritative forecast of tax issues – specifically the fraternal tax exemption – in the 2012 congressional session. Take a look and let me know if you agree:
- When it comes to tax reform, 2012 will be a lot of smoke and very little fire. There will be plenty of posturing, positioning, and pontificating – but not much in the way of actual reforms. However, we’ll be able to get a good handle on how the more serious post-election debate over tax reforms will play out. It’s vital that we keep close tabs on the developments and make sure lawmakers on both sides of the aisle know who we are and what we do so that when negotiations begin in earnest we’re not first on the menu.
- Congressional gridlock works to our advantage. After all, we’re not trying to pass legislation; we simply want to maintain an environment that allows our unique business model the opportunity to prosper. So while the political stalemate may be frustrating – particularly given the nasty tone of the comments by some lawmakers – a “do nothing” Congress doesn’t really hurt us.
- Our government is more likely to be funded by a series of temporary “continuing resolutions” than guided by a budget approved by both chambers of Congress and signed by the President.
- Depending on the outcome of the November elections (and you’ll be able to gain a unique insight as to how they might play out from James Carville and Mary Matalin’s presentation at the Alliance’s 2012 Annual Meeting!), the lame duck session of Congress may produce the most frenetic activity of the past two years.
- States are an often overlooked battlegrounds. While the fledgling economic recovery is floating the financial boats of many states, the severe budget crises that many states are still facing make it appealing to introduce legislation that would repeal the tax exemptions for everyone from charities to churches to fraternals. Even though these proposals may have seemingly little support, it doesn’t take much for bills like this to catch fire and move to governors’ desks in a matter of weeks. The Alliance is monitoring activities in this area and we’ll alert you when something breaks - check out our 2012 session update included in this week’s Weekly Headlines. But we all need to take a lesson from the Boy Scouts and “be prepared.”