The Dems first project; tax cuts for the "rich"

Perhaps Jimmy Carter will hurry up and die so that he can roll over in his grave.

In another sign of just how badly messed up the Republican Party had become we find out that producing a true tax cut will be among the first priorities of the new Democrat majority.

From The Washington Post:

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.

Fixing the AMT has long been a top priority for Sen. Max Baucus (D-Mont.), who is in line to head the Senate Finance Committee. Last year, Baucus co-authored a bill to repeal the tax with Senate Finance Chairman Charles E. Grassley (R-Iowa).

Rep. Charles B. Rangel (D-N.Y.), the presumptive chairman of the tax-writing House Ways and Means Committee, this week put fixing the AMT at the top of his agenda, calling it far more urgent than dealing with President Bush's request to extend the 2001 and 2003 tax cuts, which are scheduled to expire in 2010.

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In simple terms, the AMT is sort of a flat tax with two brackets, 26 and 28 percent, and fewer deductions. Credits for dependents, medical expenses, and state and local taxes are all disallowed. Instead, taxpayers get a single big deduction, called the AMT exemption, which is set this year at $62,550 for married couples and $42,500 for singles. Taxpayers must compute their taxes both ways and pay whichever is higher.

The impact is harshest on taxpayers with annual incomes of $100,000 to $500,000. The truly rich typically are not affected because their regular tax rates already are higher than under the AMT.

This year, the AMT is expected to ensnare 3.8 million taxpayers. Next year, the AMT exemption is scheduled to drop precipitously, causing that number to balloon to 23 million households, according to the congressional Joint Committee on Taxation.

The AMT is the handiwork of predatory liberals who were apoplectic at the thought that someone out there might be avoiding paying one penny of taxes that the government might otherwise be squeezing out of them.

The result is a classic example of the law of unintended consequences.

The new House leadership should be encouraged to take up this issue and returning Republicans need to use this issue as the ideal starting point in reaching out to the 52 "blue-dog" (conservative) Democrats (many of whom just got themselves elected by running to the right of their "Republican" opponents in the recent election).

One of the two keys to limiting the damage that can be done by the new ultra-left Democrats who comprise the new leadership of the House and Senate is going to be Republicans forging alliances with the new conservative Democrats (that is if they really are conservative).

One way that average Americans can do their part in this is by making it clear to their congressmen that the only acceptable "fix" for the AMT is the Baucus plan to simply repeal it.

If the President and house Republicans play their cards right they can get the AMT repeal bundled up in a bill which will outright repeal the death tax and extend at least some of the President's tax cuts. Those tax cuts are, after all, a big part of the reason why the economy is doing so well. Democrats, now that they are in a position to take at least partial credit for the good economy will not want to do anything to harm it.

Republicans are supposed to be the party of what's good for America, not just what's good for the Republican Party. Here is an opportunity to put that into practice.