Tax Developments in 2007
By: Richard Chapo | Posted: 03rd January 2007
As we turn to 2007, it is almost time to start thinking about the unthinkable. Yep, taxes. So, what developments can we expect to see in 2007 on the tax front?
Tax Developments in 2007
Taxes and death, the two things you just can’t avoid. Well, hopefully you only have to deal with taxes in 2007, but the coming tax changes might make you wish for death. Frankly, 2007 is stacking up as a bad year on the tax front. Our government has been spending money like a debutant on Rodeo Drive and the bill is starting to come due. You know what that means. Your taxes are going to go up.
The Republican Party touts itself as a promoter of the conservative philosophy. While the Bush Administration has certainly held to this ideal on the social front, it has dropped the ball on the fiscal front. In 2000, we had a balanced budget when President Bush came to office. Now the only thing we are balancing is debt payments. From the cost of the Iraq War to the tragic devastation of Hurricane Katrina to spending bills that would make even the most tax and spend Democrats blush, the Bush Administration has been doling out our tax payer dollar like there is no tomorrow. Unfortunately, there is a tomorrow and it is now.
As you know, the recent elections removed the Republican Party majorities in the House and Senate of Congress. Oddly, this portends an immediate future where the Democratic Party will be arguing for fiscal constraint, a position supposedly held by the Republican Party. Essentially, there is going to be a lot of debate on the issue of who is going to pay for all this expenditure. Although the final result of the debate is unknown, you can expect some type of increased tax. It may come in rate increases across the board or something more subtle, but it will come.
One area where we might see tax revenues increase is the net. The Bush Administration, particularly Vice-President Cheney, has been making noise about taxing the internet. Cheney seems to be particularly interested in auction sites with EBay being front and center in his mind. Lucky for Ebay! Still, 2007 may represent the first year we see a concerted federal tax on internet transactions, probably in the form of a sales tax.
A more unnerving area of tax may come in the field of audits. The IRS annually reports large “tax gaps”, but audits a relatively puny number of people and businesses. With a presidential election coming in 2008, neither political party may be particularly interested in tackling the tax issue. To find some extra money, they may just charge the IRS with the task of closing the tax gap by increasing audits. If this occurs, millions of Americans will begin to experience a lack of sleep.
Ultimate, the tax landscape in 2007 will not impact you or me until 2008 when it is time to actually file our 2007 returns. That being said, it is important to keep up on developments because there surely will be some significant ones.
Richard A. Chapo is with BusinessTaxRecovery.com - providing information on IRS Tax Debt Settlement Help.
About the Author
Occupation: Attorney and Traveler
Rick Chapo is with Nomad Journals - makers of
writing journals. He is also with BusinessTaxRecovery.com - information on
taxes.
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Tags: president bush, spending money, final result, rodeo drive, debt payments, immediate future, rate increases, tax payer, majorities, iraq war, bush administration