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Enjoy tax day 2012, next year could be 'Taxageddon'

Sure, this tax day won't be fun, but a raft of tax cuts are set to expire this year, and with Congress preoccupied by Election 2012, Americans face the prospect of a much bigger tax bill in 2013.

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But while America talks tax turkey today, the chances of fixing the tax code between now and December are slim, says long-time Washington watcher Stan Collender of Qorvis Communications.

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Mr. Collender points out that many expect Washington’s best – and perhaps only – opportunity to legislate on tax issues will be the lame duck session between November and year’s end. Between tax day and November, the argument goes, members of Congress will be too distracted by the national political election to make much headway on such tough issues.

That leaves the lame duck. And that’s hardly an auspicious moment for many practical reasons.

While there are seven weeks on the calendar between Election Day and New Year’s Eve, Collender says, that’s really more like four weeks when you account for Christmas, Thanksgiving, and a one-week exhale after the election.

Lame duck sessions are “notoriously difficult” for legislating, Collender points out, as ousted or retiring members and their staff are looking for their next jobs and, eventually, losing their offices to incoming members.

“Some [exiting] members just stop voting, they go home, the leadership can’t force them to do anything,” Collender says. “What are you going to do, take away their committee assignments? It’s difficult to count votes and difficult for leadership to maintain discipline.”

Given a cloudy electoral situation – it’s unlikely one party will sweep Congress and the White House – and the lame duck’s limitations, where will taxpayers be at year’s end? Collender thinks they’ll be left largely in the lurch with short-term extension of current tax law – Bush tax cuts and payroll tax cut, live on! –before Congress returns in January to battle anew.

“Instead of the mother of all lame duck sessions it could be the mother of all disappointments,” Collender says. Americans will be saying, “ ‘Curses! Foiled again!’ and we go on for another six months.”

See you next April.

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