House Passes AMT Bill - But Jacks Up Other Taxes

[red states rule]

The Dems passed relief for some from the AMT - but they turn around and increase other taxes - such as the capital gains tax

Smart move if you want to decrease investments

This is just the beginning. Dems have a $1 trillon dollar tax increase bill waiting in the wings

Now it has to pass the Senate. If it does, it willl be DOA when it gets to pres Bush's desk


House passes relief from AMT
By S.A. Miller

House Democrats narrowly passed legislation yesterday that would spare middle-class families from the alternative minimum tax (AMT) this year, overcoming Republican objections that it "pays for" the relief by raising others' income taxes and sets up future tax increases.

It passed in a near party-line 216-193 vote, with eight Democrats and 185 Republicans opposing the measure. No Republicans voted for passage.

The bill faces significant opposition in the Senate, and is overshadowed by a veto threat from President Bush because it offsets middle-class tax breaks with $81 billion in new taxes on Wall Street fund managers.

House Speaker Nancy Pelosi said the Temporary Tax Relief Act of 2007 ended the Bush era of tax cuts for the rich at the expense of the middle class.

"Today we reverse that [with] tax cuts for the middle class paid for by the wealthiest people in our country," the California Democrat said. "This legislation will ensure that our children will not inherit a legacy of debt."

She declared that the "Democratic Party is the party of fiscal responsibility."

for the complete article

http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071110/NATION/111100031/1001

[JohnDoe]

Rsr,
How I see it, is that the middle class was having to pay for a tax that was instituted for people like Warren Buffet, the richest man in America today. Warren Buffet himself recognized that something is wrong when he paid only 15% in taxes from his income earned while his secretary had to pay 35% in taxes for the much lesser money that she has earned.

OVERALL, there is no tax rise with this AMT fix.... it just levels the playing field and takes the taxes that were MEANT for the wealthiest in our country, the AMT TAX, which was wrongly put upon the middle class family of 4 making only $60 grand a year, and realigning this tax on the middle class to the people it was meant to be applied to...the wealthiest.

No more taxes will be coming in to the federal kitty for them to spend.

jd

[red states rule]

Rsr,
How I see it, is that the middle class was having to pay for a tax that was instituted for people like Warren Buffet, the richest man in America today. Warren Buffet himself recognized that something is wrong when he paid only 15% in taxes from his income earned while his secretary had to pay 35% in taxes for the much lesser money that she has earned.

OVERALL, there is no tax rise with this AMT fix.... it just levels the playing field and takes the taxes that were MEANT for the wealthiest in our country, the AMT TAX, which was wrongly put upon the middle class family of 4 making only $60 grand a year, and realigning this tax on the middle class to the people it was meant to be applied to...the wealthiest.

No more taxes will be coming in to the federal kitty for them to spend.

jd



JD here are the facts

Right now taxpayers are sent in a RECORD amonut of tax dollars to DC. The "rich" are paying a HIGHER persentage and MORE dollars in taxes AFTER the tax cuts

The top 1% pay about 36% of all Federal Income taxes

The top 50% pay about 97% of all Federal income taxes

add to that, Dems want to repeal all the tax cuts on top of these tax increases they passed yesterday

From the Washington Post

If Congress does not act to prevent these hikes, the impact will be dramatic. According to an analysis by the Treasury Department, for a family of four earning $50,000, it will be, an average tax hike of $2,100. Five million taxpayers currently paying no federal income tax will be brought onto the tax rolls. Marginal tax rates would rise for most taxpayers. The tax on dividend income would more than double and capital gains tax rate would jump from 15 percent to 20 percent. In a time when the tax on capital has been declining in other countries to encourage investment and attract capital, the U.S. tax code is scheduled to head in the opposite direction.
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110901790.html


So do Dems consider a couple making $50,000 rich?

By raising the capital gains tax, Dems will make investors stop investing. Why rick your money when you will have a 20 point increase in your tax?

[red states rule]

BTW, the "rich" are paying alot more then their "fair share"

Americans coughed up a record $2.568 trillion in taxes to the IRS in 2007, or 6.7% more than in 2006. This means federal receipts have climbed by $785 billion since the 2003 investment tax cuts, the largest four-year revenue increase in U.S. history. Income, dividend and capital gains tax rates were all cut in 2003, but individual income tax receipts have soared by 46.3% in four years, with payments by the wealthy accounting for most of the windfall. Last year's increase in individual income payments was 11.3%, or more than double the rate of growth in nominal GDP. Don't worry, class warriors: Hannah Montana and others among the "new rich" are paying their taxes.

Overall federal revenue is now 18.8% of GDP, compared with the 18.2% average of the past 40 years. The nearby table shows how far off CBO was, as usual, in its static-revenue estimates that failed to anticipate the impact of taxes on incentives and growth.
http://online.wsj.com/article/SB1191...googlenews_wsj

[JohnDoe]

I don't understand? You think the family of 4 making $60 grand a year SHOULD PAY THE AMT TAX, that was MEANT for the multi billionaire?

What about these people that are paying a tax that WAS NOT and NEVER WAS intended for them to have to pay?

I believe in a progressive income tax, not a regressive one. And as it stands now the top 1% of this country has a tax rate of about 15%, while the secretary is paying about 25%-35%?

This is extremely unfair. The middle class already have to worry about the huge rise in gasoline prices just to get back and forth to work, the huge rise in their share of family healthcare and the huge rise in college costs for their children and the huge rise in material necessities such as food and clothes?

[red states rule]

I don't understand? You think the family of 4 making $60 grand a year SHOULD PAY THE AMT TAX, that was MEANT for the multi billionaire?

What about these people that are paying a tax that WAS NOT and NEVER WAS intended for them to have to pay?

I believe in a progressive income tax, not a regressive one. And as it stands now the top 1% of this country has a tax rate of about 15%, while the secretary is paying about 25%-35%?

This is extremely unfair. The middle class already have to worry about the huge rise in gasoline prices just to get back and forth to work, the huge rise in their share of family healthcare and the huge rise in college costs for their children and the huge rise in material necessities such as food and clothes?


JD you are missing some important points. Dems are INCREASING taxes on the middle class. When they repeal the Bush tax cuts, increase the gas tax, and jack up the capital gains tax - the middle class will be nailed as well

Did you miss where the "rich" are currently paying a huge majority of taxes? It is common to have these movers and shakers forking over 50 to 60% of their income in taxes

They employ people, start and operate business, and make the economy grow. With the capital gaines taxes going up it will cripple investment. The Dow will drop big time as investors take their profits now and avoid paying 20% more in taxes. That will criple companies and drag the economy down further


Here is the tax breakdown from the IRS


The top 1% pat 36% of federal income taxes

The top 10% pay 84%

and the top 50% pay 96%

How much more do you want them to pay JD?

[red states rule]

BTW, the capital gains tax cut has brough in MORE revenue to the government then it did when the rate was higher


The 2003 Tax Cut on Capital Gains Entirely Paid for Itself
I’m not just saying it — CBO is.

On Thursday the Congressional Budget Office released its annual Budget and Economic Outlook, and buried in one of its nearly impenetrable tables of numbers is a remarkable story that has gone entirely unreported by the mainstream media: The 2003 tax cut on capital gains has entirely paid for itself. More than paid for itself. Way more.

To appreciate this story, we have to go back in time to January 2003, before the tax cut was enacted. Table 3-5 on page 60 in CBO’s Budget and Economic Outlook published in 2003 estimated that capital-gains tax liabilities would be $60 billion in 2004 and $65 billion in 2005, for a two-year total of $125 billion.

Now let’s move forward a year, to January 2004, after the capital-gains tax cut had been enacted. Table 4-4 on page 82 in CBO’s Budget and Economic Outlook of that year shows that the estimates for capital-gains tax liabilities had been lowered to $46 billion in 2004 and $52 billion in 2005, for a two-year total of $98 billion. Compare the original $125 billion total to the new $98 billion total, and we can infer that CBO was forecasting that the tax cut would cost the government $27 billion in revenues.

Those are the estimates. Now let’s see how things really turned out. Take a look at Table 4-4 on page 92 of the Budget and Economic Outlook released this week. You’ll see that actual liabilities from capital-gains taxes were $71 billion in 2004, and $80 billion in 2005, for a two-year total of $151 billion. So let’s do the math one more time: Subtract the originally estimated two-year liability of $125 billion from the actual liability of $151 billion, and you get a $26 billion upside surprise for the government. Yes, instead of costing the government $27 billion in revenues, the tax cuts actually earned the government $26 billion extra.

CBO’s estimate of the “cost” of the tax cut was virtually 180 degrees wrong. The Laffer curve lives!

This straight-A report card on supply-side tax-cutting was noted Thursday by Daniel Clifton of the American Shareholders Association — the man who predicted that exactly this would happen when the tax cuts were first enacted. Clifton wrote on his blog,

a capital gains tax cut spurs the growth of new businesses, increases the wage of workers, enhances consumer purchasing power, and grows the economy at large, resulting in more overall gains to be taxed. When capital is taxed at a lower rate, any revenue losses are offset because there is more overall capital being produced, and thus more total revenue being generated.
Using the same kind of analysis, we can see that attempts to raise tax revenues by raising tax rates simply doesn’t work. Consider the massive increase in personal income-tax rates imposed by President Clinton and a Democratic Congress in 1993. Compare actual total tax revenues for the four years from 1993 to 1996 to what had been estimated by CBO in 1992 before the tax hikes took effect. Despite increasing the top tax rate on incomes by 16 percent to 28 percent, actual revenues only beat the 1992 estimate by less than 1 percent.

So what led to the gusher of tax revenues in the late 1990s that helped to put the federal budget into surplus? Simple: It was the capital-gains tax cut engineered by a Republican Congress in 1997. Compare actual total tax revenues for the three years from 1997 to 1999 to what had been previously estimated by CBO in January 1997. Despite cutting the capital-gains tax rate by 28 percent, actual total revenues beat the 1997 estimate by more than 11 percent.

These are the numbers. They don’t lie. It’s the Left that lies — just like former Clinton Treasury Secretary Robert Rubin did this week in an op-ed in the Wall Street Journal when he said

The proponents of supply-side theory who assert that tax cuts will wholly — or even significantly — pay for themselves (through increased growth and federal tax revenues), appear to be no more accurate now than they were in the ’90s.
The numbers show that supply-side theory is accurate now and that it was accurate in the ’90s. With the latest evidence from the CBO in hand, as Daniel Clifton says, “It’s time to make the capital gains and dividend tax cuts permanent. Congress has no excuse at this point.”

— Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at don@trendmacro.com.

http://www.nationalreview.com/nrof_luskin/luskin200601270946.asp