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.
Recent comments
2 days 10 hours ago
2 days 16 hours ago
4 days 19 hours ago
5 days 7 hours ago
1 week 9 hours ago
1 week 17 hours ago
1 week 4 days ago
1 week 5 days ago
1 week 5 days ago
1 week 5 days ago