Congress

It's rare enough in this age of politician worship and dutiful rules-following for a citizen to speak truth to Power, but it's outright stunning when Power speaks truth to citizens.

One Christmas tradition Congress could do without is the broken process of passing the annual Omnibus Spending Bill, which we recently did right before the holiday recess.

Every December Congress fights and argues over spending and never seems to be able to pass the necessary appropriations until the very last minute. There is panic and threats of government shut downs and reduction in essential services. And they always threaten the essential services, as if there is no waste they could possibly eliminate instead. This past December, right on cue the administration warned about dire civilian defense department layoffs if the money didn't come soon.

Time to Give Congress the Pink Slip?

Eighteen percent. That is the total number of Americans who currently approve of the job Congress is doing, according to an August 2007 Gallup Poll. It’s a significant drop, to say the least, from the 84 percent approval rating Congress received one month after the September 11 tragedy. Americans today are clearly fed up with their elected leaders, yet are doing little to take action and effect change. In fact, in the 2006 mid-term election, nearly 60 percent of Americans didn’t exercise their right to vote.

Representative Charles Rangel’s recently announced plan to address the impending Alternative Minimum Tax’s application to middle-class Americans demonstrates limited economic understanding.

The Alternative Minimum Tax (AMT) began in the late 1960's because 155 wealthy taxpayers had become savvy enough with loopholes that they managed to avoid income taxes altogether. Very few Americans avoided taxes completely this way, nonetheless, policy was enacted that now threatens 25 million Americans.

Rangel's plan boasts loudly about repealing the AMT, but under the Democrats’ pay-as-you-go rules, actual tax cuts are not allowed. Congress must replace any tax revenue reduction with an increase somewhere else, and of course, there are no rules preventing tax hikes. Thus, a new 4% surtax on incomes over $150,000 for singles and $200,000 for couples is proposed to "pay for" the estimated lost revenue. This simultaneously raises $36 billion MORE than simply leaving the AMT alone, and creates a huge new marriage penalty tax. It won't be long before $150,000 is an average income, and middle class taxpayers will again face the situation we see coming today from inflation and the AMT. Overall, the Rangel tax plan is estimated to increase taxes by $3.5 trillion over the next 10 years.