Tweet
Tax-cutting Dems?
Democratic leaders this week vowed to make the alternative minimum tax a centerpiece of next year's budget debate, saying the levy threatens to unfairly increase tax bills for millions of middle-class families by the end of the decade.
The complex and expensive tax was designed to prevent the super-rich from using deductions, credits and other shelters to avoid paying the Internal Revenue Service. But because of rising incomes, the tax is expected to expand to more than 30 million taxpayers in 2010 from 3.8 million mostly well-off households in 2006.
Fixing the AMT has long been a top priority for Sen. Max Baucus (D-Mont.), who is in line to head the Senate Finance Committee. Last year, Baucus co-authored a bill to repeal the tax with Senate Finance Chairman Charles E. Grassley (R-Iowa).
Rep. Charles B. Rangel (D-N.Y.), the presumptive chairman of the tax-writing House Ways and Means Committee, this week put fixing the AMT at the top of his agenda, calling it far more urgent than dealing with President Bush's request to extend the 2001 and 2003 tax cuts, which are scheduled to expire in 2010.
And yesterday, House Democratic Whip Steny H. Hoyer (D-Md.), who is campaigning to keep his leadership post, said Democrats will make "fixing the AMT . . . a priority of tax policy next year."
The focus on the AMT is hardly surprising, given that victims of the tax have been concentrated in high-cost urban areas such as Washington, New York and San Francisco -- places that tend to vote Democratic. Rangel, Hoyer and Nancy Pelosi (D-Calif.), the presumptive House speaker, all represent states hit hard by the AMT, which is sometimes called the "blue-state tax." To map states with the highest concentrations of AMT taxpayers is to draw bull's-eyes over California and the Northeastern seaboard...
By 2010, "the AMT will become the de facto tax system for filers in the $200,000 to $500,000 income range, 94 percent of whom will face the tax," according to a report by the Tax Policy Center. About half of tax filers making $75,000 to $100,000 will have to pay the tax, including 89 percent of married couples in that income bracket who have at least two children.
In the past, Congress has patched the AMT one year at a time, primarily by increasing the exemption amount. Next year, to hold the number of affected taxpayers steady at about 4 million, the patch would cost about $50 billion, according to the Joint Committee on Taxation.
Getting rid of the tax altogether would be even more expensive: more than $1 trillion over the next decade, by various estimates. Budget experts doubt that Democrats can do it without reneging on their promise to reduce the budget deficit or winning an agreement from Republicans to raise taxes elsewhere.
The complex and expensive tax was designed to prevent the super-rich from using deductions, credits and other shelters to avoid paying the Internal Revenue Service. But because of rising incomes, the tax is expected to expand to more than 30 million taxpayers in 2010 from 3.8 million mostly well-off households in 2006.
Fixing the AMT has long been a top priority for Sen. Max Baucus (D-Mont.), who is in line to head the Senate Finance Committee. Last year, Baucus co-authored a bill to repeal the tax with Senate Finance Chairman Charles E. Grassley (R-Iowa).
Rep. Charles B. Rangel (D-N.Y.), the presumptive chairman of the tax-writing House Ways and Means Committee, this week put fixing the AMT at the top of his agenda, calling it far more urgent than dealing with President Bush's request to extend the 2001 and 2003 tax cuts, which are scheduled to expire in 2010.
And yesterday, House Democratic Whip Steny H. Hoyer (D-Md.), who is campaigning to keep his leadership post, said Democrats will make "fixing the AMT . . . a priority of tax policy next year."
The focus on the AMT is hardly surprising, given that victims of the tax have been concentrated in high-cost urban areas such as Washington, New York and San Francisco -- places that tend to vote Democratic. Rangel, Hoyer and Nancy Pelosi (D-Calif.), the presumptive House speaker, all represent states hit hard by the AMT, which is sometimes called the "blue-state tax." To map states with the highest concentrations of AMT taxpayers is to draw bull's-eyes over California and the Northeastern seaboard...
By 2010, "the AMT will become the de facto tax system for filers in the $200,000 to $500,000 income range, 94 percent of whom will face the tax," according to a report by the Tax Policy Center. About half of tax filers making $75,000 to $100,000 will have to pay the tax, including 89 percent of married couples in that income bracket who have at least two children.
In the past, Congress has patched the AMT one year at a time, primarily by increasing the exemption amount. Next year, to hold the number of affected taxpayers steady at about 4 million, the patch would cost about $50 billion, according to the Joint Committee on Taxation.
Getting rid of the tax altogether would be even more expensive: more than $1 trillion over the next decade, by various estimates. Budget experts doubt that Democrats can do it without reneging on their promise to reduce the budget deficit or winning an agreement from Republicans to raise taxes elsewhere.
to the Democrats if they go through with this. It's nice to see someone looking out for the little guy*...* "Little guy" in this case meaning households earning $100,000 to $500,000 a year, ie. much of the richest 5%...
Comment