The Investment Scientist

Posts Tagged ‘doctors. defined benefit plan

Be prepared for a tax cut sunset

(This is an article I submitted to Physicians Practice magazine, an edited version was published.)

With President Obama re-election, there is now no doubt that the Bush tax cuts will expire come January 1st, 2013.

Why is there a sunset clause in President Bush’s tax cuts?

In 2001 and 2003, Congress passed, and President Bush signed into law, significant tax reductions for nearly all taxpayers. These cuts included marginal rate reductions, the introduction of a new 10% tax bracket, an expansion of the child tax credit, and a variety of other provisions. Both bills were passed using a Senate procedure known as “reconciliation” – a tactic that lowers the threshold for cloture to a simple majority of senators (as opposed to a 60-vote supermajority).

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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