The deadlock on taxes is unlikely to ease soon. It appears likely that any action on bigger-ticket tax items will be delayed until after the Nov. elections.
That includes decisions on continuing the Bush tax cuts and extending provisions that lapsed after 2009 and the very important alternativeminimum tax.

Politics is the reason for this.

Democrats want to make a campaign issue of Republican support for keeping the Bush tax cuts for higher incomers, while stressing GOP opposition to other measures to help lower incomers. They hope to score political points by holding a debate on the tax cut extension next month, before lawmakers go home for the elections.

Republicans are relishing the battle, proclaiming their view that tax hikes on small business would derail the recovery.
With all this acrimony, there’s little chance Congress will decide the issue in Sept.

This increases chances of a short extension of the Bush tax cuts for everyone,not just those in the lower tax brackets. That includes the tax bracket reductions
and the 15% top rate on long-term gains and dividends.

With an agreement needed by year-end, the easiest solution facing lawmakers is to extend the cuts for everyone for 2011 and then try to draw up a more permanent fix for the tax system during 2011.