No it is not quite “Marriage, Italian Style” but it could be just as stimulating! U.S. corporate cash reserves have grown (apparently) to an all time historic high of almost 2 trillion dollars. Maybe the idiots in Washington could figure out how to foster companies to loosen the purse strings and invest some of this money (rather than borrowing cash from the Chinese and having the Government spend it!).
There is little doubt that there is a rather deep seated anti-business bias that runs thru the Democratic Party. I suspect that this is a remnant of some ill fitting counter culture baggage. I would hasten to inform the great party that this is America, if you are trying to stimulate the economy you might wish to consider engaging business owners and their checkbooks!
How about starting by figuring out what tax policy is going to be for the coming year/years? Whether taxes are going to go up or down, the unknown is a lot more damaging then a clear, stated policy one way or the other.
As I sat with clients this week to do tax planning I kept having to preface every remark with the caveat “as of right now …….” I thought, how absurd, that in July I cannot give a client a reasonable idea of the tax consequences of a particular action in 2011! Businesses and business owners do not do well with ambiguity; it makes tax and strategic planning impossible. We have known for 10 years that the infamous Bush tax cuts were going to sunset in 2010 and yet we still sit in July of 2010 with a no Federal estate tax policy and no real idea what the tax code is going to look like when the clock ticks past midnight on January 1, 2011.
Keep in mind the scheduled tax change (if the Bush tax cuts are allowed to simply sunset) are fairly extreme, we would in an instant move back (essentially) to the tax code in place @ the end of the Clinton administration. While this would NOT be the end of the civilization as we know it, and the fires of hell would probably not open up and consume our country (I say this with all due respect for W.S.J. opinion makers who would disagree and could no doubt PROVE me wrong!) it would nonetheless represent a fairly extensive, one time change to the federal tax code. I would also add that the liquidity of Federal tax policy makes it impossible for many states to establish their taxation schemes for 2011 and that increases the unease for business owners.
Clarity in tax & fiscal policy would make executives and business owners all over America feel more comfortable about moving forward with business expansions, hiring and purchasing, and that, my friend would be, much like Sophia Loren in "Marriage, Italian Style," a source of stimulation!
No comments:
Post a Comment