CPA: "Same old, same old" in Washington as Fiscal Cliff Looms

December 3, 2012 Updated Dec 3, 2012 at 9:57 AM EDT

By WKBW News
By Business First by Allissa Kline

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December 3, 2012 Updated Dec 3, 2012 at 9:57 AM EDT

(WKBW) - There are not many days remaining in 2012 and federal lawmakers continue to be embroiled in negotiations to avert the so-called "fiscal cliff" disaster that threatens to push the country into financial ruin.

President Obama wants to extend Bush-era tax breaks for all but the wealthiest Americans.

The GOP doesn't think that's a good idea.

If the two sides don't reach a deal, the tax breaks will expire Dec. 31th. Economists say the impact - combined with a series of automatic federal budget cuts set to take hold starting Jan. 1st - could lead to another recession.

While negotiations drag on, professionals such as CPA Eric Lasch continue to wait for clarity. Lasch is senior tax manager at Lougen Valenti Bookbinder & Weintraub LLP in Amherst.

His job, by necessity, requires information about tax rates. When those rates are up in the air, he and others in his field have a hard time advising clients.

I asked him today about estate taxes, which are part of the fiscal cliff conversation.

Right now, estates values at more than $5 million aren't subject to the current 35 percent estate tax rate. In January, the threshold is set to drop to $1 million and the rate is set to rise to 55 percent.

Here's what Lasch had to say:

"If nothing happens, the exclusion goes back to $1 million and the rate goes up," Lasch said. "So the country is waiting, holding its breath, to know what (lawmakers) are going to do. The word out of Washington, even in the last 24 to 48 hours, is that there are roadblocks.

The president still wants huge tax increases. The Republicans want to put certain things like revenue on the table. Right now, it seems to be more of a logjam than hope."

The approach of the holidays is only going to add more pressure to the situation, he said.

"I'm not sure when (lawmakers) go home ... but we don't have that many business working days in Washington to get this done. I was optimistic a couple of weeks ago that maybe they could get something done, but this seems like same old, same old in Washington."

The President went to Pennsylvania Friday to urge Americans to support his plan to raise taxes on the wealthy and extend tax breaks for the middle class.

Republican party leaders continue to argue that raising taxes on anyone is a bad idea.

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