Assuming that we’re still around after Dec. 21, the date when the Mayan calendar runs out, we’ll be only eleven days away from falling over the fiscal cliff. This means that, starting on Jan. 2, 2013, our taxes would be increased, government spending on its various programs would be cut, and the country might experience a corresponding reduction in the 2013 federal deficit.
This is confusing on several levels. First of all, we’re already almost through the first quarter of fiscal 2013, which started Oct. 1. However, before 1976, it was even more absurd because the fiscal year used to start on July 1 of the year before the calendar year. But previously Congress passed the Congressional Budget and Impoundment Control Act (1974) to allow itself more time to come up with a budget. This went into effect for the following Congress. So, why not change the date of the fiscal year again? Theoretically, Congress could pick whatever date it likes.
In business, for example, Cisco Systems uses a 53-week calendar that begins on the first Monday in March of the year previous to the beginning of the next calendar year. Other corporations and other countries have variations on the theme. For reasons that seem to be incomprehensible to our Congressional representatives, Canada’s fiscal year begins on January 1 and ends December 31, the same as its calendar year. What a ridiculous idea!
Second, the tax year in the U.S. does not correspond to the fiscal year; it operates on the calendar year. But, taxes are not due until we’re already into the third quarter of the year for which taxes are due. Furthermore, it is relatively easy to file for an extension so that taxes on income for the previous year don’t have to be paid for the current fiscal year until the following fiscal year. For reasons that mere mortals like me can’t understand, all of this seems to make sense to the people who govern on our behalf...