Once upon a time—in the late 1990s—there were only a few dozen temporary tax provisions requiring regular renewal. Now there are 141, and if Congress does indeed pass the proposed two-year extension of the Bush tax cuts, the whole income tax system will essentially be a temporary provision, the Wall Street Journal observes. The US will soon have no permanent rules for taxes on salaries, capital gains, dividends or Social Security, a level of uncertainty rare in developed nations.
“I haven’t seen anything like it, and it’s hard historically to find anything like it,” says one 94-year-old ex-IRS commissioner. “This Congress has left an awful lot up in the air.” Which is problematic, because economists, executives and business owners say this kind of tax uncertainty discourages investment. “We are petrified,” says one small-business owner. “We would be more actively pursuing expansion opportunities if we felt like the climate was more certain.”