Congress Can Now Get to Clarifying Tax Policy

BOSTON (TheStreet) -- A popular point of punditry we've heard throughout the lead-up to Tuesday's midterm Congressional elections was that Wall Street loves gridlock.

More appropriate might be to clarify that financial markets appreciate the stasis a logjam affords. Conflict isn't the desirable environment, so much as the stability and predictability that comes from political paralysis.

Because Republicans snatched back the House, but not the Senate, the White House and all three branches will be increasingly handcuffed to each other, meaning two more years of conflict, offset perhaps only by some low-hanging fruit accomplishments that can satisfy whatever semblance of bi-partisanship may still exist.

Among that fruit may be long overdue clarifications on tax policy, a long-lingering bugaboo that was intentionally punted beyond last night's elections.

To start with are the so-called Bush tax cuts and the prospect that tax rates will rise for most of the country on Dec. 31.

Behind the scenes there is no shortage of Democrats, despite the constant din of "they help the rich, not the economy" rhetoric, who support at least some extension of the cuts. Now that the election has passed and play-nice party unity will probably take a back seat to broader compromise, expect to see action on these cuts sooner, rather than later, perhaps even as part of the upcoming lame duck session.

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