Will substantial change come before 2013?

• Author: Roberts, Tyler
• Position: TAX & REGULATION

Though the certainty of taxation exists --that is clearly understood senior-level financial executives are currently faced with a growing amount of uncertainty regarding tax rates, the extension of key tax provisions and a potential reformation of the United States tax code.

The discussion has already begun, but the likelihood of major reforms in the next year is doubtful.

As 2012 gears up for what could be one of the most grueling elections in generations, the following takes a look at what is on the radar. While uncertainty abounds, there are specific things that readers can do to be prepared for the months ahead.

The Failed Super Committee and Sequestration

It is helpful to view the overall picture of the economic climate in the U.S. to better understand what to expect. The U.S. is currently grappling with high unemployment and a major debt/deficit problem. Both sides of the political aisle do not seem to be able to agree on anything substantial, and the nation continues to be at risk for a potential double-dip recession.

The U.S. credit rating was downgraded for the first time in its history by Standard & Poor's in August 2011 (from AAA to AA+), and later in the year, rating agency Fitch has put the U.S. outlook at "negative."

In 2010, The Heritage Foundation, a Washington, D.C, think tank, reported: "Based on data from the Government Accountability Office, an unprecedented 43 major new regulations were imposed by Washington. And based on reports from government regulators themselves, the total cost of these rules topped $26.5 billion, far more than other years for which records are available."

Then, in 2011, The Heritage Foundation wrote: In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion. Overall, the Obama administration imposed 75 new major regulations from January 2009 to mid-FY 2011, with annual costs of $38 billion. There were only six major deregulatory actions during that time, with reported savings of just $1.5 billion."

As part of the Budget Control Act of 2011, the Joint Committee on Deficit Reduction was formed. This was a special committee comprising Democrats and Republicans that was charged with finding at least $1.2 trillion in deficit reduction by Nov. 23. Something akin to this committee had never been tried before and its formation last summer was met with high expectations.

Just before...