Blog on the Run: Reloaded

Saturday, November 11, 2006 2:27 pm

Middle-class tax cut!

Filed under: Woohoo! — Lex @ 2:27 pm

Woohoo!

Democratic leaders this week vowed to make the alternative minimum tax a centerpiece of next year’s budget debate, saying the levy threatens to unfairly increase tax bills for millions of middle-class families by the end of the decade.

The complex and expensive tax was designed to prevent the super-rich from using deductions, credits and other shelters to avoid paying the Internal Revenue Service. But because of rising incomes, the tax is expected to expand to more than 30 million taxpayers in 2010 from 3.8 million mostly well-off households in 2006.

This will be tough for anyone on either side of the aisle to vote against. That said, I’m not sure why all tax brackets aren’t already indexed for inflation. Seems like we had this conversation during the debate on the 1981 tax cuts, if not even longer ago than that.

5 Comments

  1. It is inconceivable that with a Republican Prez and Congress for four years that this low-hanging fruit was left for the Democrats. Got to give them credit for plucking it.

    Maybe the Dems will gave us sensible estate tax relief next.

    Comment by David Boyd — Saturday, November 11, 2006 7:29 pm @ 7:29 pm

  2. Or, at the very least, index the threshold to inflation.

    Comment by Lex — Sunday, November 12, 2006 1:50 pm @ 1:50 pm

  3. Right. The Republicans would have been wise to accept the offer that seemed to be on the table from time to time of increasing the exemption and indexing it. That would have protected most small businesses and homeowners in expensive locales. They held out on principle (one with which I agree), but they blew the chance to take the compromise which would have helped all but the Percy Walker types. They could have fought on principle for futher changes later on if they wanted. Now we have nothing and the possibility in 2011 of going back to much lower exemptions.

    The most stunning thing to me this election was the split among the extremely wealthy and the moderately wealthy. The moderately wealthy (I suspect a lot of these are the fiscal conservative/social libertarian types) were more than willing to leave Republicans, probably feeling neglected. Very interesting that the Dems seem eager to cemet their new relationship with this group by reforming the AMT so soon after getting in. If they’re willing to do that, they may also be willing to go a little further with things like the estate tax and tax simplification – jobs we’ve been assuming the Republicans would be better at.

    Comment by David Boyd — Sunday, November 12, 2006 6:11 pm @ 6:11 pm

  4. The most stunning thing to me this election was the split among the extremely wealthy and the moderately wealthy.

    The split is mirrored by, and perhaps caused by, the income gap, I’m told, although I haven’t seen any figures to prove it.

    Re the estate tax: I’m not holding my breath, given that so many campaigned against it as the “Paris Hilton tax cut,” but who knows? They could surprise us.

    As for simpler taxes, that’d be nice, but I don’t foresee that from either party. Too many tax lawyers and accountants make too much money from the complexity.

    Comment by Lex — Sunday, November 12, 2006 8:21 pm @ 8:21 pm

  5. Eat, drink and be merry

    I am happily surprised that the first major domestic proposal by the Dems is to rewo…

    Trackback by David Boyd — Monday, November 13, 2006 4:51 pm @ 4:51 pm


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