How these various proposals will actually fare once the results of the presidential election are known remains an open question. But that hasn't stopped tax analysts from speculating. For example, if Bush wins the election, he will have his work cut out for him. Trying to persuade Congress, especially one that may be controlled by Democrats, that large tax cuts are needed won't be easy. In the long run, Stretch believes much will depend on how the Bush tax plan is viewed by financial markets, pollsters and lawmakers. Says Stretch, "If everyone tells him the size of the cuts will put the stock market into a severe tailspin, he probably won't go for such a large tax cut."
On the other hand, if Gore is victorious-and if he faces a GOP-controlled Congress-compromise may indeed end up ruling the day. "A Congress dominated by Republicans may eventually accept some of Gore's tax proposals in order to win some of the GOP business tax-ideas, such as an extension of the moratorium placed on Internet sales taxes," says Petrecca. Stretch is in agreement that such a Congress is very likely to compromise with Gore and pass a smaller tax package than the GOP really wants to pass. "A small package would be far better than nothing at all," he adds.
In the meantime, the political give-and-take will most likely continue all the way up until the first Tuesday in November, when the voters will get to take it upon themselves to make the ultimate decision on just what kind of tax changes-not to mention president-they want.
- Deloitte & Touche, www.dtonline.com
- PricewaterhouseCoopers, 100 E. Broad St., Columbus, OH 43215, email@example.com.