As the president and Congress prepare to negotiate contentious questions associated with the fiscal cliff--across-the-board spending cuts and Bush-era tax cuts that are due to expire at year-end--expect a quick resolution of non-controversial issues, but a potentially months-long delay addressing the politically charged ones.
This is the near-term political outlook of Leon LaBrecque, a managing partner and founder of LJPR, LLC, a Troy, Mich.-based financial planning firm that serves individuals and business owners. The following are excerpts from LaBrecque's interview this month with NUL Senior Editor Warren S. Hersch
Because Democrats and Republicans have opposing positions on this issue, it's possible the Bush income tax cuts will not be resolved by year-end. But a return to the pre-2001 income tax regime could be devastating economically, pushing us back into a recession.
Unfortunately, this issue may not get resolved because of quibbling over two numbers: income levels that invoke the highest two tax brackets. But if both sides can agree on cutting tax loopholes and raising tax rates in a revenue-neutral way, then compromise might be achieved.