By now, everyone knows Rep. Charles B. Rangel is poised to introduce the “mother” of all tax reforms, the biggest and most expensive tax code overhaul since 1986. But what they don’t know is how the New York Democrat plans to pay the more than $1 trillion price tag — and that uncertainty is fueling rampant speculation from Capitol Hill to K Street.
The fiscal fortunetellers fall into four categories: Robin Hoods, Goldilockses, Chicken Littles and Scarecrows.
The Robin Hoods predict Rangel will increase taxes on the very rich and expand breaks for the poor. Rangel’s most talked-about goal is to eradicate the alternative minimum tax, expected to hit 23 million high- and middle-income families this year.
Repealing the AMT would reduce federal tax revenue by more than $800 billion over the next 10 years — and that’s assuming the Bush tax cuts expire in 2010. With the tax cuts in place, the costs would near $1 trillion.
Robin Hoods expect Rangel to swap the AMT for a new tax targeted exclusively at the highest-income payers. One often-mentioned idea, proposed by Leonard Burman, director of the Urban Institute’s Tax Policy Center, would impose a 4 percent surcharge on unmarried taxpayers making more than $100,000 a year and couples making more than $200,000.
The 4 percent tax proposal is more progressive than the AMT, Burman said, as it would place more of the tax burden on the wealthy. Almost 58 percent of the tax would be paid by taxpayers with incomes over $1 million. Under the current AMT law, the same group will pay only 8 percent of the AMT in 2010 — again, assuming the expiration of the Bush tax cuts.
Burman’s idea carries more than a whiff of irony. The AMT was originally designed to increase taxes on high-income individuals. When it was first passed in 1969 — a year before Rangel came to Congress — it targeted 155 high-income taxpayers.
OK, so Rangel doesn't get that soaking the rich eventually soaks everyone else. Typical Dem. He wants to replace one "the rich only have to pay" tax with another...Who suffers? John Q. Public. Rangel and Dems never get it. Taxes are one of the worst hindrances of economic progress.
Over the past 38 years, the AMT spiraled far beyond its initial targets. By 2017, it is estimated that the tax would hit at least one-third of all taxpayers.
Burman says his proposal would raise enough money to finance a complete repeal of the AMT, but, he cautions, it is not without political peril. “The advantage is that only high-income people pay the tax,” he said. “The disadvantage is that some people are going to be paying more taxes and aren’t going to be very happy about it.”
In other words, the middle class is going to get soaked again, as they eventually always do under Dem plans. As the standard of living raises and pay goes up, and these taxes are on the books, more people pay, more people suffer. Thanks Dems.
Read through each plan. It really does nothing to help Americans. Eventually, the working people get soaked. But, why should Dems care, they are in power, and as long as they can get everyone lined up at the govt. teat for healthcare and baby bonds and stuff, and continue encouraging less responsibility, they will continue to soak us. And if you don't go along with it, you just might get Fostered.
