So what have I missed?
When I left, Charlie Rangel was promoting a revenue neutral fix of the Alternative Minimum Tax, and in my last post more than a month ago, I weighed in with some (faint) praise for the the proposal. I concluded that, on balance, the benefit of getting rid of the truly onerous AMT outweighed the negative aspects of raising taxes on the top brackets to pay for it:
This morning I heard President Bush whining that the Democratic Congress took too long to get the AMT fix to his desk:
"Getting rid of the AMT is an important incremental step in the right direction. Rangel's bill accomplishes this in a fiscally responsible manner, even if the top ten percent must pay a little more to finally put a stake through the heart of this undead bloodsucking tax code vampire."
Of course this begs the question of exactly what the Republican Congress was doing about the AMT for the SIX YEARS before the Democratic Congress got something to him this year - but I wondered - exactly what actually did pass? From Jeffrey Birnbaum writing at the Washington Post:
"Bush also complained that legislation to protect middle- and upper-middle-class families "from the burden of the alternative minimum tax" came so late that it was likely to slow the processing of tens of billions of dollars in tax refunds. "When Congress wastes so much time and leaves its work to the final days before Christmas, it is not a responsible way to run this government," Bush said."
It's a band-aid, not a cure. The AMT vampire still walks the earth sucking the lifeblood from middle class taxpayers. The patch is the equivalent of putting garlic around the neck of some 2007 taxpayers to keep the undead AMT ghoul at bay, just to let it slake it's blood thirst on other unprotected 2007 middle class taxpayers. And in 2008???
"Had the patch not been approved, 81 percent of taxpayers with taxable incomes of $100,000 to $200,000 would have been affected by the AMT, according to the congressional Joint Committee on Taxation. Nearly half of taxpayers who earn $75,000 to $100,000 would also have been affected without yesterday's legislation. Thanks to the bill, however, 10 percent of those who make $100,000 to $200,000 and fewer than 2 percent of taxpayers who earn $75,000 to $100,000 will now have to pay the AMT. Overall, 4 million households will have to pay the tax, about the same number as in 2006...
On Tuesday, the Senate rejected a House-passed AMT patch that would have covered its cost by closing offshore tax havens used by hedge fund managers. The Senate earlier rejected a House plan that would have increased the tax rate on managers of hedge funds and private-equity firms."
Net net: The same number of people who got screwed by the AMT on their 2006 taxes will get screwed again on 2007 tax returns. The AMT problem has simply been pushed out of sight/out of mind over the November, 2008 election horizon. It will have to be addressed again (or not) next December after we have elected a new President and Congress. This shell game is what we got from tRepublican obstruction in the Senate instead of putting a stake through the heart of the AMT now and paying for it from higher taxes on Hedge and Private Equity funds/managers. The middle class still carries the load. And GWB and the Republicans in the Senate seem to think that this is somehow a superior solution because ??????
"Congress next year must patch the AMT again or force millions of families to pay more tax. The patch's revenue loss then will rise to $65 billion, an amount that Andrew B. Lyon of Pricewaterhouse Coopers said would be "extremely difficult" to raise."
You got me. Whatever. The GOP needs a lot of help. I'll see what I can do.
It'll take me a while to ramp back up, but I should have DWSUWF back in full focus when we get past the holidays and in time for the Iowa/New Hampshire returns.
In the meantime, what better way to wade back in, than an all new Carnival of Divided Government? In honor of Bill O'Reilly winning the war against Christmas while we were gone, we'll be publishing the latest edition precisely at the moment of the Northern Hemisphere Winter Solstice - tomorrow, December 21, 2007 at 11:08 PM PST. There is still time to get your submission in, blog articles may be submitted for the next carnival of divided government using the carnival submission form, but a reminder - if your post does not include the words "divided government" - don't bother.