The Coming Year: Social Security Top Tax Issue

Congress has a heap of tax issues on its plate, but don't expect any action until President Clinton's impeachment trial winds up.

"No one knows if it's going to be short, long, congenial or ugly," says Ron Aucutt, an estate planning tax attorney and partner at McGuire Woods Battle & Boothe in Washington, D.C. In any case, "it will definitely tie up the Senate."

Once the impeachment mess is resolved, Congress probably will turn first to Social Security, the issue du jour. I talked to a number of tax lawyers and tax-policy directors from the major accounting firms, and some believe Congress will not go forward with anything else until the Social Security system is placed on firmer financial footing.

Republican leaders said this week they would like to see tax cuts of up to $500 billion over the next ten years. If and when they and their Democratic counterparts get past the Social Security issue, the list of "must-haves" in a 1999 tax bill looks a lot like last year's: eliminating the "marriage penalty," creating a long-term care credit, updating the alternative minimum tax and reducing estate taxes.

Social Security

The government's Social Security trust fund is forecast to run out of money around 2012, drained by retiring baby boomers, according to a February 1997 report from the House-Senate Joint Economic Committee. ...