Tax cuts for the rich?

[dude1394]

Watching the dems at work is going to be cute. So the first tax policy they plan to take up is the Alternative Minimum Tax. Now I'm all for tax cutting but this one is cute.

So lowering taxes across the board is tax cuts for the RICH! But...getting rid of the AMT that most adversely effects the 100K-500K tax brackets is populism Heh.

http://www.washingtonpost.com/wp-dyn...111001800.html

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 impact is harshest on taxpayers with annual incomes of $100,000 to $500,000. The truly rich typically are not affected because their regular tax rates already are higher than under the AMT.

I haven't thought about how they would replace all of that revenue that they will "lose". Maybe the economy will increase?

[Mavdog]

the point is the amt will affect taxpayers who weren't meant to be included.

JUDY WOODRUFF, NewsHour Special Correspondent: It was first created in the late 1960s to make sure that a few hundred of the wealthiest citizens paid their share of taxes. But 3 1/2 decades later, the Alternative Minimum Tax is now hitting millions of Americans.

The Alternative Minimum Tax, or AMT for short, is a tax code that runs parallel to regular income tax. It offers fewer deductions and just two tax rates: 26 and 28 percent. Taxpayers who are subject to it have to calculate their regular income tax, compare that to the AMT, and pay whichever amount is larger.

More than 3.5 million Americans are expected to pay the alternative tax this year, and the number is growing rapidly. The Congressional Budget Office predicts that, by 2010, one in five taxpayers could be hit by it, including most married couples with incomes over $100,000.

http://www.pbs.org/newshour/bb/econo.../tax_4-14.html

[dude1394]

Hey...as I said I'm all for tax breaks. But it does seem quite hypocritical (but mostly just funny) for the dems to whine about tax breaks for the rich when their first order of business is.....

Tax breaks for the rich.

[Pirate]

Originally Posted by Mavdog

the point is the amt will affect taxpayers who weren't meant to be included.

It's now beginning to effect their favored class.

Who would that be? The rich? Nah, they were always included. The poor? Nah, if they're poor they arent making anywhere near 100,000 a year.

Then whom? CONGRESSMEN, most likely. And yes, we can be sure they never meant for congressmen to be included in any higher tax rates!

[Mavdog]

Originally Posted by dude1394

Hey...as I said I'm all for tax breaks. But it does seem quite hypocritical (but mostly just funny) for the dems to whine about tax breaks for the rich when their first order of business is.....

Tax breaks for the rich.

a household income of $100,000 is "rich"?

[Drbio]

It is to a significant percentage of Americans....and even more to the world.

[Rhylan]

True, but it's nowhere near "rich" enough to be taxed more than 28%.

[dude1394]

Originally Posted by Mavdog

a household income of $100,000 is "rich"?

Typical parsing mavie. The range is 100K-500K. You tell me if it's "rich" or not.

100K isn't? What about 2,3,4,5? Million?

[dude1394]

Interesting. Since the AMT is very prevalent in the NorthEast, to keep the tax revenue neutral, who's taxes will get raised. Since Rangel doesn't think anyone would want to live in Mississippi anyway, guess who? The link has the discussion.

http://powerlineblog.com/archives/015907.php

Now that the Democrats control the House, Charlie Rangel will be in charge of writing tax legislation. (That's a sentence I'd hoped never to have to write!) As you've likely heard, he and other Democrats are talking about giving tax relief to millions of upper-income taxpayers by "fixing" the alternative minimum tax. There is a certain irony in this, perhaps, but I don't suppose many people still harbor illusions about who the Democrats' real constituencies are. It's been commonly remarked in the press, as in the Boston Globe article linked above, that:

The focus on the tax 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.

........
Assume the $250K “rich” family in MS has deductible taxes of $25K and mortgage interest on the McMansion at $15K; for the NY family, the taxes are $45K and the mortage interest on the SAME McMansion is $25K...The MS family would pay slightly more in Fed Income tax, but BOTH would pay at AMT rates…

In order to CUT the AMT and maintain REVENUE NEUTRALITY, Charlie R. would have to INCREASE regular tax rates....both familes would have AMT taxes reduced, and both would have regular taxes increased compared to the old tax regime. However, both would no longer pay rthe AMT tax..they would both pay the regular tax which would now be the “higher of”....but the EFFECT would be that the MS families regular (and now applicable) tax would be much greater than their old AMT tax...while the NY family’s new regular tax would be LOWER than their old AMT tax!!!...In my simple example, there would be an increase of about 7.5% for the MS family and a corresponding decrease for the NY family (to keep revenue neutrality at the federal level).

That looks right to me. I'll be curious to know whether our readers can find a flaw in B.O.B.'s logic. If you want to comment, go here.[/quote]

[Mavdog]

this is crazy. just because the new majority leadership in congress is against the amt it does not mean that those against the new majority party should support the amt.

from the reccomendations of the president's (that's pres george w. bush...) advisory panel on federal tax reform:
• Elimination of the Alternative Minimum Tax, which is projected to raise the taxes of more than 21 million taxpayers in 2006 and 52 million taxpayers by 2015.

this should be a bipartisan issue that everyone can support. why don't you?

[dude1394]

As I've posted many times before I'm perfectly fine with getting rid of the AMT, in fact I'd like to see more tax cuts.

But to have the dems portray themselves as the defenders of the common man and somehow this isn't a "tax cut for the rich" is delicious.

Hey...when you actually have to DO SOMETHING you get to get hammered for it. And their hypocrisy is definitely showing.

[Rhylan]

I support it. Go Charlie! Keep repealing taxes, my brother.

[chumdawg]

Originally Posted by dude1394

Since Rangel doesn't think anyone would want to live in Mississippi anyway, guess who?

Would you? Would you like to live in Mississippi?

Why are they being used as a baseline, anyway?

And what is a "McMansion?" That's the very first time I have seen that term.

[dude1394]

Originally Posted by chumdawg

Would you? Would you like to live in Mississippi?

More than a lot of northern states, sure. I'd probably move down to the gulf coast area. But I get peaved when I heard the open bias against poor whites from elites (usually from someone who makes it a point of yelling about it for other minorities). It seems everyone is a protected minority except poor whites.

Why are they being used as a baseline, anyway?

I think the thought experiment was because of Rangels statement. It would probably work with any lower income state.

And what is a "McMansion?" That's the very first time I have seen that term.

These are very large homes built on older lots I believe. You see a lot of them in the older dallas neighborhoods, an older home is torn down and a new very out of place mansion is thrown up.

I don't know why they were called McMansions' but that's pretty common name used.

From the always useful wiki with some photos:

http://en.wikipedia.org/wiki/McMansion

McMansion is a slang architectural term which first came into use in the United States during the 1980s as a pejorative description and an idiom. It describes a particular style of housing that—as its name suggests—is both large like a mansion and as culturally ubiquitous as McDonald's fast food restaurants.

In addition to ubiquity, almost every reason to poke fun at McDonald's has been applied metaphorically to "McMansions". These criticisms include the deviation from traditional local or regional architectural style, a mass-produced appearance, and perceived negative effects on nature and neighborhoods.

[mcsluggo]

I think you are focusing on the wrong "delicious irony" here, Dude.

BOTH parties have been chomping at the bit to either eliminate or "fix" the AMT for a couple of years. Both parties. AMT was written to prevent the rich from lining up enough tax loop-holes to avoid paying taxes (You could go ahead and call this the Leona Helmsley (spelling?) tax law), but it was written very sloppily, with nominal $ income thresholds, that take don't take inflation (or anything else) into acount.

While $100 K represented real riches 15 years ago, today it is smack in the middle-class zone IF YOU LIVE IN A BIG CITY....

...Which brings us to your other point...

what the eff are you talking about in your comments about the bias against poor southern whites? There aren't any poor southern blacks anymore? this only affects the white Mississippi population?

The issue is relative cost of living... if you make $100 K somewhere in rural Mississippi, you still are very well off, whether in a "keeping up with the Jones' " standpoint, or even an absolute purchasing power equivelency (to someone living in a coastal city). On the other hand, I live in DC, and make $100K, and to be frank: I am not rich by any objective conceivable stretch of the imagination. If I lived in San Francisco and made $100K there is ZERO possible way I could puchase a home (in the city, at least).

You appreciate the difference in the regions when we talk about the minimum wage, why don't you think it matters when we talk about the minimum tax?

[mcsluggo]

I take it back. I really AM rich if you hold me up to a Malawi, or Sri Lanka, or Guatemalan (or etc...) yardstick.

But I don't think that the question of whether Americans in general are well off is the issue at hand...

[dude1394]

Originally Posted by mcsluggo

I think you are focusing on the wrong "delicious irony" here, Dude.

BOTH parties have been chomping at the bit to either eliminate or "fix" the AMT for a couple of years. Both parties. AMT was written to prevent the rich from lining up enough tax loop-holes to avoid paying taxes (You could go ahead and call this the Leona Helmsley (spelling?) tax law), but it was written very sloppily, with nominal $ income thresholds, that take don't take inflation (or anything else) into acount.

While $100 K represented real riches 15 years ago, today it is smack in the middle-class zone IF YOU LIVE IN A BIG CITY....

...Which brings us to your other point...

what the eff are you talking about in your comments about the bias against poor southern whites? There aren't any poor southern blacks anymore? this only affects the white Mississippi population?

The issue is relative cost of living... if you make $100 K somewhere in rural Mississippi, you still are very well off, whether in a "keeping up with the Jones' " standpoint, or even an absolute purchasing power equivelency (to someone living in a coastal city). On the other hand, I live in DC, and make $100K, and to be frank: I am not rich by any objective conceivable stretch of the imagination. If I lived in San Francisco and made $100K there is ZERO possible way I could puchase a home (in the city, at least).

You appreciate the difference in the regions when we talk about the minimum wage, why don't you think it matters when we talk about the minimum tax?

Sure there are poor southern blacks. It's just a pet peeve of mine. I've encountered in many "enlightened" folks who would be aghast if I used a stereotype for their favorite minority but have absolutely no qualms in ridiculing poor white folks. Rangel is doing it as well.

The delicious irony(or hypocrisy if you like) here is that the first tax policy the democrats tackle (all the while they have been railing about tax cuts for the rich for the last 6 years) is one that primarily is for the very rich they have been railing about.

I believe that I have posted in this thread three seperate times (make this a fourth) that I support eliminating this tax.

The issue that I see here is that folks don't like to see the dems be hypocrites which it sounds as if they are imo.

So dubya cuts the top tax rates from 39 to 35%. That bracket effects 350K+ it's tax breaks for the rich, but the dems give the 100K-500K a tax break and it's tax cuts for the middle class.

[mcsluggo]

You missed my (original) point. EVERYONE agrees that the AMT needs to be either scrapped or fixed. Everyone.

If there is democratic hyprocracy you want to target, I could perhaps see the fact that they are trumpetin g it (if indeed they are?), but not that they say it has to be changed... there is little debate on that.

[dude1394]

Actually maybe everyone DOESN'T think the AMT should be scrapped or "fixed". Especially those in low tax rate fly-over country. But it does appear that those in blue-state, high tax rates...DO very much want it fiexed.

http://instapundit.com/archives2/2007/01/post_1683.php

IN AN EARLIER POST, I noted Mickey Kaus speculating that the Alternative Minimum Tax is mostly bad because of the hassle. But reading Ann Althouse, I wonder if Turbo Tax isn't a friend of Big Government.

Ann Althouse says it's not the hassle, it's the money:

I use TurboTax, which does the calculations automatically, and the AMT cost me $4900 last year. It's definitely the money!

And if you want to know why the AMT costs me so much, let me tell you it's a reason that Democrats should care about, because it's all about living in a blue state. The deductions I lose in the AMT calculation are -- as I wrote here -- are state and local taxes, like my incredible $12,ooo property tax bill.

Althouse explains why liberals should hate the AMT and conservatives should like it: The AMT makes it harder to maintain high state and local taxes.

That's real money. On the other hand, the hassle factor probably does matter some, and programs like Turbo Tax also make increased tax code complexity easier. Should conservatives hate those, too?

It does appear that as expected this is a "tax-cut" for the democratic rich.

[Silk Smoov]

Originally Posted by dude1394

Hey...as I said I'm all for tax breaks. But it does seem quite hypocritical (but mostly just funny) for the dems to whine about tax breaks for the rich when their first order of business is.....

Tax breaks for the rich.

Dont fool yourself, most of the top middle class are dems. Just ask anybody that lives in CA, New York and ILL. Dems rule those areas and by far those areas have the highest income.

I think their is an misconception on what the Dems are all about. I look at it this way. Reps are for business owners and super rich, and Dems are for Upper Middle class and poor.

I think the AMT is the centerpiece that affects the upper middle class the hardest. Case in point the Dems are attacking it.

[Silk Smoov]

Originally Posted by dude1394

Actually maybe everyone DOESN'T think the AMT should be scrapped or "fixed". Especially those in low tax rate fly-over country. But it does appear that those in blue-state, high tax rates...DO very much want it fiexed.

http://instapundit.com/archives2/2007/01/post_1683.php


It does appear that as expected this is a "tax-cut" for the democratic rich.

Originally Posted by dude1394

It does appear that as expected this is a "tax-cut" for the democratic rich.

Is that bad????

I may or may not be a dem or rep, but I see this as damn good....I am for whoever helps line my pockets. It does not matter to me which side passes the right bill, just "SHOW ME THE MONEY"

I think we just about all agree that AMT needs to go away, but I just think that we shouldn't point at either party on this issue. I see this as a money issue that affects us all in the upper middle class. Not to be funny, but it is time for the Dems to think about the upper Middle class a little more. I think this is a good start, and especially if you want more rep votes.

I promise, the Dems will win more rep votes by doing away with the AMT. There are more upper middle class reps than super rich reps by far. So, where do you target? Simple!!!! Upper Middle Class. You reach the dems and reps in this way...If this AMT goes away, and the Dems are leading the charge, then I cast my vote for them, same thing goes if the reps lead the charge. Its the way of life. If the Dems wants to win the presidential election in 2008, then they need to reach the masses here in the US..

The masses are Christians, so reach out to us in everything you do. In 2004, the Dems lost out because Bush reached out to Christians and the values of Christians. JMVHO..

[Pirate]

I find it annoying when Republicans want to crackback on the Dems for passing a tax cut, afraid of giving any "credit" away rather than agreeing on what they all want to get done.

If the Dems are open to cutting taxes, cut the damn taxes while they are in the mood, and be thankful. Hypocrisy by the Dems? Who cares. Dems are acting like non-Dems? Who cares. There will be plenty of issues to fuss about later, if you want a fuss. Just get it done.