Taxable Talk

Stock options have been in the news over the past few weeks, for all the wrong reasons. Many corporations have been accused of backdating the options.

Senator Charles Grassley (R-IA), head of the Senate Finance Committee, isn't happy about this. He told Reuters, "If the tax laws are inadequate on stock options backdating, I want to beef them up." Grassley has scheduled a hearing on September 9th to discuss the options mess.

From our vantage point expect tightening of the rules and regulations dealing with stock options, and a likelihood that fewer options will be issued in the future.

News Story: Reuters

The new Pension Law, which will be signed into law by President Bush next week, will impact areas that have nothing to do with pensions. Joe Kristan at Roth Tax Updates writes how you will need to have a receipt for all of your deductions beginning for 2007. Yesterday Joe noted how the new legislation impacts corporate life insurance.

With Congress, it's not the title of the legislation, it's what's inside that counts.

One day, sometime in the future, Congress will complete all their work on appropriation and tax measures before the August recess. But it won't be this year (and it probably won't be for many years).

On Thursday the Senate failed to consider a repeal of the estate tax. Republicans in the House tied a minimum wage increase and various extenders to this bill (including the Research and Development credit). Now the extenders may not happen, which is making the high tech lobby unhappy.

Personally, I expect Congress to pass a version of this legislation...in November, after the election. Neither side wants to give the other any political capital before the election. Yet many of the proposals are too important politically not to get passed.

In other words, business as usual in Washington.

News Story: Wall Street Journal (Pay Link)