The Election's impact on Business

Now that the election is over, it will be interesting to see what happens in Congress in 2011 and how it plans to help businesses.  With anemic economic growth and high unemployment, Congress has much work to do.  However, there are some issues that need to be dealt with immediately:

• the expiration of the Bush ear tax cuts
• the implementation of Obamacare

There is much speculation as to whether the Bush tax cuts will be renewed.  2011 will see one of the largest tax increases on the American taxpayer if the law is not renewed.  The tax increase will be immediate.  Payrolls will be affected come January 2011.  LFC did an analysis on the tax increases for up-coming payrolls.  It can be found here.  Whether Congress can enact into law the extension of these laws is something we will just have to wait to see.  With high budget deficits, it does seem highly likely that the preseident would veto any attempt to keep the tax cuts in place.

A campaign theme by many running for office was the repeal of Obamacare. This is going to be a tremendous task.  A bill to repeal one of the signature pieces of legislation for which some in Congress have fought for decades to enact may be near impossible to do.  However, you may see attempts to defund it and then work to repeal it later.  One thing, however, that could be a huge benerfit for business is the repeal of the 1099 requirement on vendor transactions that takes effect in 2012.  Click here to learn more about the 1099 requirement.  The compliance cost to fulfill this requirement is going to be extremely expensive.  Any effort to end this aspect of the health care law by Congress will be welcomed by business.

The legislative battles in Congress of the up-coming months will be very interesting. We will see if Congress lives up to its campaign promises to limit the scope of government on American business.