The current tax laws are set to expire at the end of 2012. Estate and gift tax laws which are currently very favorable to most individuals and estates will expire unless Congress and the President vote to extend them. Many speculate now that politicians are so worried about election results that they may not do anything extreme one way or the other for fear of losing voters.
Republican aides have stated the House will vote in a one-year extension of all of the Bush tax cuts before the end July, 2012, along with instructions for Congress to reform the entire tax code. Democratic Senate aides have stated that the Senate will vote to extend the Bush tax cuts before August, but will only consider President Obama’s proposal to extend the cuts for incomes of $250,000 and below. Many political analysts believe Obama’s insistence that the tax cuts be available only for people with incomes of $250,000 and below will result in no agreement on the tax changes and likely no new law.