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Thursday, April 20, 2017

The August Deadline For Tax Reform

I just read yet another article discussing whether or not Congress will meet the August deadline for tax reform.  It's another of those idiotic obsessions of the mainstream media.  There is no deadline in August.

Here's reality.  When tax reform passes, it will have an effective date on which the new tax structure commences.  It is all but certain that the effective date will be either January 1, 2017 or January 1, 2018.  It is just too complicated to start new taxes or to end old ones at any point other than the beginning of the year.  Further, since we are already in late April, it is very likely that the effective date will be the start of 2018.  That will give people a chance to prepare for the new tax structures. 

In that reality, here's the question to ponder:  is there any difference if the tax changes are passed in July, September or November?  The simple answer is no.  The only reason why there is an "August deadline" is that some in the House leadership said that was the goal they set for themselves.  In many respects it's like someone going on a diet and saying that he or she wants to lose 15 pounds in two months.  If that weight loss takes 3 months, does that make the diet a failure?  No.  Is it worth focusing on whether or not the two month goal will be met, or should the focus better be on how best to lose weight?

It's time for the media to get over its obsession with the non-existent August deadline.

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