Potomac Watch

It is on the mind, however, of Christopher Bergin, president and publisher of the non-profit Tax Analysts, which, among other things produces Tax Notes, a highly-regarded online publication that analyzes complex tax issues. Bergin gets questions all the time from people representing high-wealth clients about the fate of the Bush tax cuts.

The way he sees it, though, the Bush tax cuts, along with all other components of tax policy, are just the canary in the coal mine. The  entire tax system (include estate taxes), he says, are a poster child for a broken political process. And at the end of that process are tax practitioners, including those that advise small businesses, who are stuck with advising clients on what amounts to an unfair, immensely complex and economically inefficient system.

Given the lack of incentive for Congress to deal promptly with the expiring tax cuts, the alternative minimum tax and the tax extenders, Bergin says, you can now add a fourth problem with our current tax-writing policy — it is nothing more than a series of temporary fixes that cannot be planned for.

This puts people like the readers of National Underwriter in the center of the storm, a storm that is nearly impossible for any one party to understand fully.

In the meantime, it is highly problematic that Congress will act on tax policy in a lame-duck session after the election. If Republicans take control of Congress and the White House, they would have little incentive to sustain the Bush tax cuts.

Look at it this way: if the Republicans sweep the White House and Congress, the Bush tax cuts become moot. But if Obama wins the election, then the Republicans are going to have to compromise on tax policy. The bottom line is that Obama will not sign something he does not agree to. And if there is no legislation on the matter at all, then all of those Bush tax cuts (except for the ones pertaining to retirement) go away. And nobody really wants that.

In the end, what we are left with is a hot potato of an issue that nobody seems to want to take ownership of, let alone show some real leadership with. With that kind of attitude, the real losers are the insurers.