TaxVox

Let’s face it, from a tax policy perspective, 2009 was a bust. Except for creating a bunch of new credits in the name of economic stimulus, Washington pretty much ignored the revenue code. 2010 will be very different. Facing trillions of dollars of expiring Bush-era tax cuts, President Obama and Congress will be forced to make some critical decisions in the new year.

Two cheers for San Francisco. At least one agency in the city by the bay has been trying to require non-profits that receive public funds to show concrete results in return for the money. This sort of performance-based budgeting has been all the rage among consultants for years, but San Francisco is doing it. And it is not easy.

Thanks to Senate gridlock, taxpayers engaged in estate planning will suffer whiplash over coming months as the federal estate tax disappears and reappears, possibly unexpectedly and retroactively. When the Senate refused to act Wednesday, it opened the door for the estate tax to disappear in two weeks--although no one knows for how long. Not only will the tax end, but the gift tax rate will fall to 35 percent. And, hardly noticed by most, only some assets inherited in 2010 will get “step-up” in basis.

It is almost 2010, and Congress is scrambling to figure out what it is going to do about the estate tax. In some perverse way, it’s fun to watch lawmakers dive into a mess largely of their own making. But as you do, don’t be distracted by the argument over the size of estates that should be excluded from tax, or whether the rules are extended for one year or two. The real argument is over the rate. That’s where the bucks are.