Given that the government needs more revenue than it's currently taking in, which will be hard to achieve, and that tax reform is also hard to achieve, I'm not sure what the point of proposing a revenue-neutral tax reform plan is. That said, Charlie Rangel's plan (PDF) seems pretty good within that constraint. Republicans are deriding it as the "Mother of All Tax Hikes" but many more people would see reductions, either due to AMT repeal or to modifications to several tax credits, than increases. The big revenue enhancements come from a "limitation of benefits of individual AMT repeal" provision that only applied to people making over $200,000 (and possibly even only people richer than that) and from elimination of the "carried interest" loophole for hedge fund and private equity fund managers.
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Rangel Tax Plan
26 Oct 2007 03:21 pm
Comments (9)
We NEED to keep the AMT.
If we don't then we will collect far less revenue from the people at the top.
Raise the exemption to $400,000 so nobody earning less than $400,000 would even have to think about it.
But if you don't have an AMT then you will see lots of rich people collecting millions in cash income and have ZERO taxable income.
Trust me. This is my job. It will be so much easier without having to worry about being caught by AMT
I thought the problem with the AMT was that it hadn't been indexed for inflation. Why not just go back to the year it was enacted and index up for all the inflation since then?
Can't we just stick with saying the Republicans are not telling the truth when they say this raises taxes? And get the press to just stop parroting them?
And isn't there a corporate tax reduction in addition to the AMT limitation, too? Or is that a different bill?
And is Neil right that the "limitation of benefits" of repealing the AMT will again permit the rich to pay no taxes at all?
So many questions, so few answers.
Can't we just stick with saying the Republicans are not telling the truth when they say this raises taxes?
Not to be unduly reasonable, or anything, but the plan achieves overall revenue neutrality by raising some people's taxes and lowering other's, right? So saying it raises [some] taxes is spin, and perhaps unfair, but on some level, true?
>So saying it raises [some] taxes is spin, and perhaps unfair, but on some level, true?
Yeah, but it sure sets an awfully low bar for "the mother of all" anything. Low to the point of being dishonest, I would claim.
Rea,
Actually, it's more of a case of lie of omission than a lie of commision. Instead of stating a plain falsehood (a lie of commision), they state a falsehood by leaving out pertinent and relevant pieces of information (a lie of omission). In other words, the GOP would be telling the truth if they said, "Rangel's plan raises taxes ON THE WEALTHY, while lowering taxes on everyone else." By leaving out the modifying phrase "ON THE WEALTHY", and by leaving out the clause "while lowering taxes on everyone else", the GOP are uttering a lie of omission.
The government needs more than $2.7 trillion?
I'd love to see Democrats run on the poverty of the government.
henry asked -
"I thought the problem with the AMT was that it hadn't been indexed for inflation. Why not just go back to the year it was enacted and index up for all the inflation since then?"
That would be fine, except annual tax revenue would fall by hundreds of billions of dollars - if not considerably more (depending on how the roll-back was implemented).
The US government is already spending a few hundred billion a year more than we tax each year.
As it is now, the AMT increases taxes on upper middled class taxpayers every year. The Rangel plan, as I understand it, will keep the AMT in place at current levels. That amounts to a tax repeal because the government was already planning on spending that extra tax revenue.
To make up the difference (to be revenue neutral) the Rangel plan will add a surcharge on only the highest income households.
Comments closed November 09, 2007.
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Heads in the Sand
We NEED to keep the AMT.
If we don't then we will collect far less revenue from the people at the top.
Raise the exemption to $400,000 so nobody earning less than $400,000 would even have to think about it.
But if you don't have an AMT then you will see lots of rich people collecting millions in cash income and have ZERO taxable income.
Trust me. This is my job. It will be so much easier without having to worry about being caught by AMT
Posted by neil wilson | October 26, 2007 3:29 PM