A Tax Increase On The Rich Only: Do You Believe Those Words?
Posted: Friday, February 23, 2007
by Mick McNesby
http://conservative-politics-infofind.com
The Alternative Minimum Tax (AMT) is expected to hit 23
million taxpayers when they file their returns at this time next year, for the
tax year 2007
Bill Clinton’s tax increase of 1993 is the culprit for
millions of taxpayers.
When President Clinton and the Democratic Congress raised
the rates on the AMT, in 1993, they also failed to index for inflation. Only
300,000 tax payers, paid the AMT then.
If we were to go back to the rates prior to the tax
increase, only 2.6 million taxpayers would be subject to the tax, next year,
according to the Joint Tax Committee, (JTC).
Most of those 2.6 million are in the top 2%. Among the other
20 million plus, most are in the broad middle class, some well down the ladder
in the middle class.
Beware of Democratic Spin
Since the Bush tax cuts, middle class families have saved an
average of $2000 a year, despite the never ending Democrat falsehood of tax
cuts for the rich.
However, because the 1993 tax increase failed to index for
inflation, the AMT will now put the bite on millions of taxpayers for whom it
was never intended.
The spin by Democrats, attempts to portray the Bush tax
cuts, including the millions saved by the middle class, as having something to
do with why more taxpayers will be paying the AMT.
If congress takes no action, those who become subject to the
AMT for the first time, will still pay a lower tax because of the Bush tax
cuts, after the addition of the AMT.
When Democrat spin
starts, which it surely will, don’t be deceived.
Recall, that right up until his election, Bill Clinton
promised a middle class tax cut.
Immediately upon taking office, he fulfilled that promise by
raising gas taxes, income tax rates, Medicare payroll taxes, and taxes on many
social security recipients.
If the Democratic congress would roll back the AMT rates to
the pre-Clinton years, and index those rates, about 20 million taxpayers,
mostly middle class would escape a tax that was never intended for their level
of purchasing power.
The original AMT was instituted due to Democrat hysteria in
1969 upon learning that 21 millionaires had paid no tax.
We’ve heard reference many times to the law of unintended
consequences. Most of these laws come from feel good Democrat proposals
that postulate about victims and inequality.
Democrats made many promises to the middle class in 2006,
let’s see if actions speak louder than words.
This is just a factually incorrect argument-- very misleading. Here's what you need to know: 1) the main reason 23 million people may end up paying AMT in 2007 is the cumulative impact of inflation over the past 20 years. Every Congress since 1986 has explicitly chosen not to index the exemptions for inflation, so they're worth a little bit less each year. Pinning this cumulative decision on any single Congress (as you do with the 1993 Clinton Congress) is simply wrong. Each party controlled Congress during this period; if you want to play the blame game, blame both parties in every year between 1987 and 2000. 2) It's undeniably true that the Bush tax cuts pushed a lot more people into the AMT. Bush and Congress cut the top regular income tax rates, and left the AMT rates unchanged, inexorably setting the middle class on a collision course with the AMT. One just can't get around this basic truth. You mumble about "spin" but ultimately don't deny that the tax cuts are to blame. 3) The Clinton tax changes increased the AMT rates, but this was a necessary step in order to keep the AMT properly functioning-- Congress hiked the top regular income tax rate, so if the AMT rate hadn't been changed, the number of AMT payers would have dropped substantially. It was just the right thing to do. And the net impact of the Clinton AMT changes was to reduce the growth of the AMT. (to find out more, see the brief Tax Policy Center article linked below.) 4) You say that things could be fixed "if the Democratic congress would roll back the AMT rates to the pre-Clinton years, and index those rates." But it has nothing to do with the 1993 rate hikes, and everything to do with indexation. 5) I don't mean to be mean here. There are very influential folks (primarily the Wall Street Journal editorial board) spinning exactly the story you're telling, so it's not surprising that you'd believe it. But the WSJ story is simply false. Good resources to check out: the Tax Policy Center website has a great piece on this issue . And the very same Joint Tax Committee paper you cite makes it quite clear that inflation-- not the Clinton tax changes-- is to blame for the current AMT explosion.
articulate, well researched, informative