TAX CUTS FOR THE RICH AND EXPLODING DEFICITS IS A CHANGE OF DIRECTION?:

Alternative Minimum Tax Targeted: Democrats Seek Fix For Middle-Class Families (Lori Montgomery, 11/11/06, Washington Post)

By 2010, “the AMT will become the de facto tax system for filers in the $200,000 to $500,000 income range, 94 percent of whom will face the tax,” according to a report by the Tax Policy Center. About half of tax filers making $75,000 to $100,000 will have to pay the tax, including 89 percent of married couples in that income bracket who have at least two children.

In the past, Congress has patched the AMT one year at a time, primarily by increasing the exemption amount. Next year, to hold the number of affected taxpayers steady at about 4 million, the patch would cost about $50 billion, according to the Joint Committee on Taxation.

Getting rid of the tax altogether would be even more expensive: more than $1 trillion over the next decade, by various estimates. Budget experts doubt that Democrats can do it without reneging on their promise to reduce the budget deficit or winning an agreement from Republicans to raise taxes elsewhere.

In recent weeks, experts from both parties have called the nation’s fiscal situation dire and called for a bipartisan summit to address a variety of ticking time bombs set to explode soon after the 2008 presidential election, including the AMT, Social Security, Medicaid and Medicare.

“You cannot solve this nation’s fiscal problems without increased revenue,” Robert E. Rubin, the Clinton administration Treasury secretary, told the Economic Club of Washington this week.

Political analysts see little chance for that kind of cooperation until after 2008. Bush is heavily committed to maintaining his tax cuts, arguing that they have spurred the nation’s economy. And analysts say Bush is unlikely to participate in a summit that could produce the kind of tax increase that helped drive his father, President George H.W. Bush, out of office.

White House spokesman Tony Fratto said this week that fixing the AMT is “absolutely a priority” for the president. But for now, Fratto said, “The Democrats have an opportunity to put their ideas on the table.”

The last time the Democrats had to propose legislation based on their “ideas” was ’93-’94. How’d America like it?

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5 Responses to TAX CUTS FOR THE RICH AND EXPLODING DEFICITS IS A CHANGE OF DIRECTION?:

  1. ic says:

    “a variety of ticking time bombs set to explode soon after the 2008 presidential election, including the AMT, Social Security, Medicaid and Medicare.” C’mon, don’t try to scare us again. Go back to MSM talking head tapes and news tapes for the last couple of years. The so-called Social Security problem was a Bush invention to privatize our system depriiving the AARP folks their rightful share of the grand kids’ earnings.

  2. AWW says:

    IC – agreed. Watch how quickly the economy starts doing well, social indicators up, etc now that
    the Dems have taken over. Foreign policy will still be Bush bashing until the Dems put forth some
    ideas (if that’s possible).

    It would be nice, after 6 years of obstruction, if the Dems actually try to solve these problems.
    My concern is that they will try to solve them in lefty ways and Bush, eager to finish his term on
    a positive note, goes along (like Nixon in ’73-74).

  3. Sandy P says:

    This is fun – those making between $100-$500K are now Middle class!!!!!

  4. Lou Gots says:

    Not agreed. Social Security never was other than an inter-generational copmpact. It always had that Ponzi scheme aspect, whereby suceeding cohorts were paying their seniors’ benefits. The plans to reform SS never involved having the AARP set eating dogfood; fugurative and literal “grandfathering” had a part on the privatization plans, whereby the elderly would partake of their grandchildrens’ earnings, just as their grandparents had received benetfits from theirs.

    The Social Security ‘crisis” has the same cause as the immigration crisis–the Kindermord.

  5. Orrin says:

    Close. The point is neither is a crisis and immigration in particular means SS can’t become one. We want to Reform it for social policy reasons, not financial ones.

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