www.fairtax.org
On 2/23/07, Gruss Gott <[EMAIL PROTECTED]> wrote: > > Bill Clinton's AMT Bomb > February 23, 2007; Page A10 > WALL STREET JOURNAL > > As tax season nears, Democrats in Congress are discovering they have > an urgent political bomb to defuse -- the alternative minimum tax. The > AMT already hits four million Americans, and without new legislation > this year it will explode in the pocketbooks of 23 million taxpayers > come April 15, 2008. > > What's amazing is that many Democrats and reporters are trying to > blame this looming tax increase on the 2001-2003 tax cuts. See if you > can follow their argument: Taxpayers are obliged to pay the higher of > their tax bill under either the regular IRS code or the AMT. And > because the tax cuts reduced the regular income tax of the average > family by $2,000 a year, more middle-class families are being bounced > to the AMT system. Ergo, it's all President Bush's fault. > > This logic requires overlooking that a taxpayer's bill under the AMT > is still lower than it would have been without the tax cuts. But never > mind: The political game here is to use the AMT as an excuse to > justify repealing the Bush tax cuts. > > In reality, the AMT is one more liberal monster that was created in > the name of soaking the rich but has now come back to swallow the > middle class. Democrats created the AMT in 1969, amid a political > frenzy to capture a mere 21 millionaires who had paid nothing. And the > politician most responsible for the AMT's relentless expansion in > recent years is none other than William Jefferson Clinton. > > Remember the 1993 tax hike that was supposed to fall only on the rich? > In addition to raising gas taxes and Medicare payroll taxes and income > tax rates, the Democratic Congress that year also raised the AMT: from > a 24% flat rate to a dual tax rate of 26% on AMT income up to $175,000 > and 28% on AMT income above that amount. > > It's true that the 1993 bill slightly increased the AMT's family > income exemption, but Democrats refused to index those exemptions for > inflation. So the combination of the higher rates and the failure to > index for inflation has caught more and more middle-class taxpayers in > the AMT's maw. From 1992 to 2002, this Clinton stealth tax hike > increased sixfold the number of filers paying the AMT, to nearly two > million from 300,000. > > A Joint Tax Committee (JTC) analysis requested last year by Senator > Charles Grassley of Iowa shows that about 11 million more Americans > will have to pay the AMT next year thanks to the higher post-1993 AMT > rates. The House Ways and Means Committee calculates that if you live > in a high-tax state (such as California or New York) and have two or > more kids, you're very likely to be hit with the AMT this year even if > your income is as low as $75,000. > > All of which means that if Democrats really want to spare Joe > Lunchbucket from the AMT, the cleanest solution is to repeal the > Clinton AMT rate hikes. The nearby chart, prepared by the American > Shareholders Association based on Joint Tax data, compares the number > of filers who will be hit by the AMT under current law and what would > happen if the AMT rate was moved back to the pre-Clinton 24% and the > exemption was indexed for inflation at the 2005 level of $40,250 > ($58,000 for a joint return). Going back to the pre-Clinton rates > would leave only about 2.6 million tax filers subject to an AMT > penalty next year instead of 23 million under current law. > > The estimated "cost" of this fix to the Treasury over 10 years would > be some $632 billion, which is money Democrats in Congress would > prefer to spend. But as Senator Grassley notes: "This tax was never > meant to tax the middle class, so why should we count it as a revenue > loss when we make sure they don't have to pay it?" > > There's a larger policy lesson to keep in mind as the debate unfolds > over both the AMT and the looming expiration of the Bush tax cuts in > 2010: Beware politicians who say they only want to tax the rich. > Sooner or later their tax schemes will soak the middle class because > that's where the real money is. Regarding the AMT, Democrats are now > saying they'll be glad to provide AMT relief for the middle class but > they'll have to raise taxes on CEOs and other high-income Americans to > do it. Where have we heard that one before? > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Macromedia ColdFusion MX7 Upgrade to MX7 & experience time-saving features, more productivity. http://www.adobe.com/products/coldfusion Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:228836 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
