With the presidential election closing in, political pundits have been weighing in with their predictions on not only which candidate will win, but on which issues Congress must tackle during what political analyst Andy Friedman called “the mother of all lame-duck sessions.”
Friedman, with The Washington Update, told advisors in a recent conference call that they must prepare their clients for higher taxes next year, “at least for more affluent clients—those earning north of $200,000.”
He also noted that under health care reform, those with incomes greater than $250,000 will face a new 3.8% tax on investment income. “Health care reform doesn’t add to the deficit because there are two offsets in the law: next year, investment income will be taxed higher and Medicare outlays will be reduced,” he said.
The other tax on wealthy Americans, Friedman said, will likely come from a compromise between President Obama and Congress regarding the Bush tax cuts, which expire at year-end. Obama wants the cuts to expire for those making more than $250,000, but Republicans want to extend the Bush tax cuts for everyone, including the wealthy.
As Friedman noted in a late September commentary, the lame-duck session will convene primarily between Thanksgiving and Christmas, with the returning Congress being a Republican-led House and Democratic-led Senate, regardless of the election results, he said. “Either [Obama] will have been re-elected—feeling newly-empowered to enact his policies—or he will be a lame-duck president who can do what he believes is right without concern for the consequences,” he added.
But Friedman predicted Obama will “recapture” Independents’ vote and secure a second term in the White House.