Sometimes, at this time of year, I enjoy looking at my past Congressional Christmas Wish Lists. This year, I thought it might be particularly interesting, as my last lookback was in 2018, the halfway point of the Trump Administration. We are now at that point in the Biden Administration.
In 2018, much of my list was due to the need for economic revival. Prior to Trump, my priority was tax cuts, and he delivered with the Tax Cuts and Jobs Act of 2017 (TCJA). As expected, the results were spectacular, with unemployment on the decline in every demographic, wages rising in excess of (almost nonexistent) inflation, and most people enjoying a tangible paycheck increase. The stock market was booming, as my wishes were coming true.
Tragically, the 2020 COVID-19 pandemic interrupted economic progress in unparalleled fashion. Despite temporarily shuttering most businesses, and the resultant deep recession, we began to recover almost immediately. Without TCJA, the recovery would have been much longer and more painful.
Unfortunately, TCJA tax rate cuts were written to expire in 2026, and under the Biden Administration, chances of getting the lower rates made permanent have decreased significantly. Therefore, my 2022/2023 Wish List Priority #1 is to make TCJA tax cuts permanent.
My 2018 Wishes #2 through #10 were smaller, taxpayer-friendly, “tweaks” to the Tax Code, but under the new Administration and Congress, none of them have more than a Florida snowball’s chance of seeing the light of day.
Inadvertently, a few good things have happened in the personal finance arena, albeit some for the wrong reasons. Inflation adjustments in the U.S. Tax Code have allowed savers to increase contributions to Retirement Accounts. My 2022 Wish #2 is to further increase contribution limits in excess of inflation.
Another consequence of the pandemic was the passage of the S.E.C.U.R.E. Act, now dubbed SECURE 1.0, due to a tag-alone version (called SECURE 2.0) is currently pending in Congress. Because of the immediacy of some of its provisions, my 2022 Wish #3 is to get SECURE 2.0 through Congress, and signed by President Biden, with several days left in 2022. Need I say, “Please?”
2022 Wish #4 has already been granted by the voters, who are responsible for changing the majority in the House of Representatives, effective in early January. Faced with a taxpayer-unfriendly Administration for at least two more years, the best we can wish for is a divided government, where further legislation basically grinds to a halt. When in a hole, stop digging and have patience. For now, let’s not make things worse.
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