Fiscal Cliff – What the hell just happened??

Rick Walter, CPA
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WOW – that is my educated comment on what just happened. A budget that for some reason just can’t be balanced; hard decisions on spending cuts that just can’t be made; – and a national debt that just can’t be reduced.

Looking on the bright side, (as a good tax accountant should) we have an AMT patch so that the majority of taxpayers will not have this additional tax to pay. In addition, we will get our coveted sales tax deduction here in the state of WA, so keep those receipts.

Of course, I wanted a good outcome for my clients and this makeshift bill they passed addressed most of the tax issues my office has been dealing with for the past month. However, I was thinking big picture here and looking for some long-term solutions for the crisis we find ourselves in.

I do not have an economics degree from Harvard (well, there is that one I paid $50 by mail for) or a math degree from MIT, but it is my understanding that each year the government spends roughly $3.5 trillion. Each year they collect from us $2.5 trillion. Here comes that math from Northern State College: It looks like we miss by $1 trillion each year.

When my beautiful wife and I were in this same situation (remove a couple of zeros), we found a way to increase revenue (we begged for raises and made trips to the blood bank), and decrease spending, without starving or doing nothing. The amount of nights out decreased; I ironed my own clothes; she painted her own nails; the list goes on.

I had better get off of my soap box before I fall. You know what I am talking about. If you have ever seen the movie DAVE with Kevin Klein and Sigourney Weaver – there is a scene where the “President” brings in an ordinary CPA to look over the budget and he carves out 100’s of millions of dollars, without taking away needed services. I am for hire, Mr. President.

Thanks for listening and I will talk at you again.

Author: Rick Walter, CPA

Rick Walter brings over 25 years of professional tax and accounting experience to Hutchinson & Walter. Specializing in small to mid-size business entities and start up organizations, Rick brings a deep understanding of the unique tax compliance and accounting issues specific to those entities.

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