We have a few items we would like to request from Santa Claus for Christmas — not this Christmas, mind you — we would be happy to receive them by Christmas 2008.
But frankly, we aren't sure even Santa can deliver on some of these, since they involve the active cooperation of the elves in Congress.
Nevertheless, the first item on our list is a permanent fix for the alternative minimum tax.
Our fingers are crossed that the House of Representatives and the Senate soon will deliver a temporary fix for the 2007 tax year, despite foot-dragging in the House.
We are tired of the uncertainty surrounding these last-minute AMT fixes each year, which make planning for taxes virtually impossible.
Many in Congress are anxious to pass a temporary AMT fix this year because they don't want to upset 23 million taxpayers who otherwise would suddenly find themselves paying an average of $2,000 more in income taxes April 15 — in the middle of an election year.
Next year, the election will be over in early November, so unless Santa, or someone, can hold Congress' feet to the fire before then to pass a permanent fix, there will be less urgency to pass even a temporary fix until the next election cycle two years later. And Congress will have the temptation of the extra revenue from the AMT for additional spending.
By then, however, the AMT will affect almost 30 million taxpayers each year.
So Santa, get those money- hungry elves in Congress working on a permanent fix now so we can have it in our stockings for Christmas 2008.
And while you are at it, how about getting them to throw in a revenue-neutral tax simplification plan?
The current income tax regime, even without the AMT, is almost criminally complex and involves much time and effort for any taxpayer who does not take the standard deduction.
We would also like Congress to be very careful in addressing the subprime-mortgage mess.
In fact, Santa, you might ask Congress to hold off on any action until the heat of the moment has passed. When the dust settles, Congress can look at the causes in a calm, dispassionate manner and determine what action is needed to prevent similar crises in the future.
The reform proposals being considered by Congress appear to be panic reactions and are likely to result in unintended consequences — in particular, fewer mortgages at far higher rates.
They may also open the floodgates to massive litigation costs, which surely will be passed on to borrowers.
Finally, Santa, can you get the Bush administration, Congress and the
Federal Reserve Board to work in harmony to forestall a possible
recession in 2008?
Given the damage the subprime-mortgage crisis is doing to the economy, a concerted, coordinated effort may well be needed if the damage isn't to be worsened by a
recession.
