Thursday, January 24, 2008

Crawling Back to "Income Averaging"?

The "tax rebate" package is shaping up. Business stuff:

The business tax portion would give businesses incentives to invest in plants and equipment, give small businesses more generous expensing rules, and allow businesses suffering losses now to reclaim taxes previously paid.

At one time, the IRS Code allowed "income averaging," which was VERY useful to businesses which had "high year"/"low year" cycles. The method facilitated paying taxes (because in a "high year" the cash was there) and recognized that in a "low year" that cash was very hard to get.

Looks like the Congress may be sliding back towards that eminently sensible tax policy.

2 comments:

St. Jimbob of the Apokalypse said...

Mike Huckabee had an interesting observation about the economic stimulus. Instead of more money that's worth less, I'd rather have my current dollars be worth more.

letimus said...

...and to average out self-employed yesterdays earnings with todays Bush bucket yields. What a joke.