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Taxes, trouble and trial balloons in 2005.

Article Excerpt
Early in his second term, President George W. Bush has already signaled a willingness to spend political capital to enact changes to the federal tax system. Those changes, in whatever form they eventually take, along with a number of changes made to the tax laws during Bushes first term, will have a significant impact on the tax bills--and penalties--faced by every metals distributor.

Among the ideas wing for the president's support are elimination of many of the so-called "tax preferences" in the tax law, a flat tax of less than 20 percent to replace the current tax bracket system, and the creation of a national sales tax that would completely replace the income tax.

Late in 2004, panelists at a forum sponsored by the Brookings Institution, a Washington, D.C.-based think tank, predicted that an impending stock market crash or further devaluation of the dollar would force the Bush administration to act to reduce the deficit, therefore pushing tax reform to the back burner.

In addition to this fairly dim assessment of the prospects for fundamental tax reform, the American Bar Association Section of Taxation is pressing lawmakers to repeal or modify the alternative minimum tax, claiming that it no longer serves the purpose for which it was originally intended--to ensure that high-income individuals pay at least some tax.

Other experts have said that making the...

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