“I believe there will be a solution,” Huizenga said to a handful of local business leaders in the conference room of the JSJ Corp. in Grand Haven. “What I don't know is what the parameters are going to look like.”
The Chamber of Commerce Grand Haven-Spring Lake-Ferrysburg organized the roundtable discussion to address ramifications if Congress fails to extend current tax law by the end of the year.
Tax policies that were enacted 12 years ago during the Bush administration are set to expire at the end of the month. Left unchecked, the expiration will lead to higher income tax brackets, increased capital gains tax rates, and a slew of other individual and corporate cash consequences.
Huizenga said tax increases are likely, including loophole closures and the repeal of tax credits, no matter how this plays out.
The congressman for Michigan's 2nd District said he favors a flat tax, but that is not likely to happen in the next couple of weeks.
“The clock is running out,” Huizenga said. “We can't do a complete tax reform in the next 21 days.”
The Washington, D.C.-based Tax Policy Center estimates 90 percent of Americans would experience a tax hike in 2013 if Congress doesn't act by the end of the month. The hike would be an average of nearly $3,500 per household, totaling more than $500 billion.
According to the nonpartisan Joint Committee on Taxation, the child tax credit would be cut in half, from $1,000 to $500 per child, costing 31 million families an average of $1,028 in higher taxes.
The 10 percent tax bracket would be eliminated, raising the lowest tax rate to 15 percent. All other tax brackets would also increase.
The Joint Committee estimates a family of four earning $50,000 per year would be hit with $2,200 more in taxes if the policies expire. A single parent earning $36,000 would face $1,100 in higher taxes.
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