Tax effects of sequester

[jainen]

Last week there was some discussion in the Politics Forum about whether the automatic spending cuts had any real economic impact. I'm raising the issue here strictly in terms of non-partisan tax effects. What do you think about the IRS saying the sequester requires them to reduce refunds?

The IRS explains, "A corporation that can claim an additional first-year depreciation deduction under section 168(k) can choose instead to accelerate the use of its prior year minimum tax credits, treating the accelerated credits as refundable credits." In other words, by investing in new equipment they can use up otherwise-deferred credits, and even get a refund. Now, solely because of the sequester cuts, the refundable portion will be reduced 38%. http://www.irs.gov/Businesses/Effect-of-Sequestration-on-the-Alternative-Minimum-Tax-Credit-for-Corporations

[kcjenkins]

Just one more little hidden tax increase. Note that the 38% of the refund is 'reduced', not 'delayed' or 'suspended'.