ERMUSR MISC. ISSUES 01-13-2004 - Laserfiche WebLink

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Legislative Issues may get some tax incentives, and pretax dollars will Politics is sure te• color much of.c-.at gets done, and be allowed for retirement planning. what does not get done, in Con_..-ess in 2004. lou can expect more rhetoric than action ,n many big issues. TORT REFORM sought by business groups is likely to win passage in 2004. It will shift many class-action ENERGY POLICY will be a contentious leftover from lawsuits involving more than 100 plaintiffs and at :003. Incentives to boost energy efficiency are a good least 55 million from state courts to federal courts, bet—tax breaks for homeowners who make energy- which are deemed friendlier to business interests. sating improvements and manufacturers of energy-ef- Federal jurisdiction will apply if fewer than two-thirds :is lent appliances. Other breaks :7.:11 promote domes- of the plaintiffs live in the same state. tit energy explr=r_-non and extrs.-.en and subsidize rnatitc fury.,, _:ancrgs, 111,.__ad; ethanol, '.find, THE FEDERAL DEFICIT is expected to rise to about$600 solar and biodies.i. But Bush t.. :: - get approval for billion in 2004. Reasons include tax cuts,higher do- drilling in the Arctic National \\:':dlife Refuge. mestic spending, the occupation and rebuilding of Iraq and Afghanistan and homeland se- t( �— curity. But despite the rising red ink, 7 1 Congress won't reinstate the kinds of — — spending caps that worked in the 1990s. Spending on election-year pork is too tempting. '� `• `" I DEFENSE POLICY, while hotly debated, 11 t!1:1i ` " will remain relatively unchanged—no quick transformation to a lighter, faster and smaller military. There'll be calls 1 for a larger standing army,but that I won't happen either. Spending on high- tech weaponry is going to increase, in- cluding an additional$8 billion for mis- sile defense research and development. A TAXPAYER BILL OF RIGHTS proposal is likely to pass, making interest on refunds tax free and easing under- TRANSPORTATION PROJECTS are in for a fresh dose of payment penalties. But there'll be no permanent re- federal funding—billions for roads,bridges, tunnels peal of the estate tax in 2004. and mass transit systems. The money will be part of a Manufacturers will get an arras of tax relief as multiyear highway transportation funding bill. compensation for the loss of an export tax break ruled illegal by the World Trade Organization. JUDICIAL NOMINATIONS will spark more fireworks next Changes Congress is likely to OK include trimming year. The only way Bush will get to appoint a the top tax rate on manufacturers from 35% to 32%. Supreme Court justice during the last year of his first Congress will also pass legislation to expand tax term is if the vacancy occurs by early 2004 and if his incentives aimed at increasing charitable donations pick is close to the middle of the road. Democrats will by individuals and businesses. And it will extend a stall on any late or conservative nominee until after temporary moratorium on state and local taxation of the presidential election. Internet access services. MUTUAL FUND OVERSIGHT will prompt additional hear- INCENTIVES TO SAVE for retirement are gaining sup- ings during which lawmakers will explore such issues port and are going to be implemented incrementally. as requiring fuller disclosure of mutual fund fees and Congress is likely to increase from 701E to 75 the age limiting conflicts of interest involving fund managers. at which retirees with individual retirement accounts But opposition to additional regulation and the corn- and 401(k)s must start withdrawing funds. Annuities plexity of the issues are likely to slow legislation. WHAT'S AHEAD FOR 2004 17