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| Subject: Rebuilding america's economy and society will require getting rid of the repbublicans | |
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Author: jw |
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Date Posted: 07:13:31 10/29/07 Mon In reply to: Bev 's message, "the dem proposal Next time read up before you spout right wing rhetoric" on 10:49:21 10/27/07 Sat and the policies of economic greed they represent. We need much more government intervention in the economy to rebuild the middle class and reduce/eliminate poverty, "the market" does not solve social and environmental problems, it only makes them worse. > most people would see a tax cut . > > >href="http://money.cnn.com/2007/10/25/pf/taxes/rangel_t >ax_reform/index.htm?cnn=yes">http://money.cnn.com/2007/ >10/25/pf/taxes/rangel_tax_reform/index.htm?cnn=yes > >By Jeanne Sahadi, CNNMoney.com senior writer >October 25 2007: 3:21 PM EDT > > >NEW YORK (CNNMoney.com) -- No one actually expects >lawmakers to overhaul the tax code this year, but >House Ways and Means Chairman Charles Rangel (D-NY) >planted his flag Thursday morning by unveiling a bill >that he calls the "mother of all tax reforms." > >Rangel said on Thursday the bill "would reform the tax >code to provide a greater sense of equity and >fairness." > > >House Ways and Means Chairman Charles Rangel (D-NY) >Tax-friendly places 2007 >Top tax-friendly states >Top tax-friendly cities >State by state rankings >Republicans are calling it the "mother of all tax >hikes." > >Tax policy experts and political observers do expect >Rangel's bill to provide serious fodder for debate in >2008. > >"This is a view of coming attractions," said Greg >Valliere, chief strategist of policy research firm >Stanford Washington Research Group. > >One element of Rangel's bill that is likely to see a >vote this year, however, is his proposal to extend for >one year an Alternative Minimum Tax (AMT) patch. That >patch will prevent 21 million taxpayers from having to >pay the so-called "wealth" tax. > >Long-term, Rangel has promised his bill will "provide >tax relief to more than 90 million working families >and cut the corporate tax rate to help American >companies stay competitive internationally." > >Republicans don't see it that way. "The basics of the >package are simple: This is the largest individual >income tax increase in history," said House Ways and >Means Ranking Member Jim McCrery (R-La.) in a >statement. > >The Bush Administration isn't keen on it either. "The >legislation unveiled today would dramatically raise >taxes in ways that in my judgment would hinder >America's ability to compete in the global economy," >said Treasury Secretary Henry Paulson in a statement. > >As with any "revenue-neutral" bill, which Rangel's is, >there's no free lunch. The tax cuts proposed must be >paid for by provisions that raise an equal amount of >revenue. > >And as with any tax reform proposal, there will be >winners and losers. > >In Rangel's bill, there are likely to be welcome tax >cuts for both individual and corporate taxpayers, but >just as many unwelcome tax hikes for some. > >Here are some highlights: > >Tax cuts for individuals >AMT repeal: The premier feature of Rangel's bill is a >full repeal of the Alternative Minimum Tax (AMT), >estimated to cost $800 billion over 10 years. > >The AMT was originally intended for the wealthy few >when it was created nearly 40 years ago. But because >Congress never indexed for inflation the amount of >income exempt from AMT and because it disallows a lot >of popular tax breaks, tens of millions of >middle-class taxpayers are at risk of having to pay it. > >By definition, if you're subject to AMT you will pay >more in taxes than you would under the regular income >tax code. > >Higher standard deduction: The majority of taxpayers >take the standard deduction - they should benefit from >an increase. > >Rangel's bill calls for an increase of $850 for joint >filers and $425 for single filers. > >More generous tax credits for lower-income taxpayers: >Rangel's bill would allow more low-income couples >without children to qualify for the earned income tax >credit. For taxpayers with kids, it would also >increase the amount of the refundable child tax credit >that may be claimed. > >When a credit is refundable, that means taxpayers >claiming it could get money back even if they don't >make enough money to owe income tax. > >Tax hikes for individuals >Add an income surtax: The bill proposes that >high-income filers would pay at least a 4 percent >surtax on adjusted gross incomes (AGI) above $200,000 >for married couples filing jointly or above $150,000 >for single filers. > >So for a couple with $300,000 in AGI, they would owe >the 4 percent surtax on $100,000 ($300,000 - >$200,000). Hence, they would owe an extra $4,000 on >top of their regular tax bill. > >For couples with AGIs over $500,000, the surtax >applied would be 4.6 percent. > >With the repeal of the AMT, the majority of taxpayers >with AGIs under $500,000 would pay less than they >would under current law, the Tax Policy Center >estimates. Under current law, the Bush tax cuts would >sunset by 2011 and there would be no patch for the AMT. > >More than any other revenue raiser in the bill, this >measure is the one that will do the most to compensate >for the $800 billion cost of AMT repeal. It's >estimated to raise $832 billion over 10 years. > >Leading Republicans - including McCrery and Senate >Finance Committee Ranking Member Charles Grassley >(R-Iowa) - argue that AMT repeal is the right thing to >do to protect middle-income Americans from a tax they >were never intended to pay, so there's no need to >compensate for the cost because it was revenue that >never should have been collected in the first place. > >Lawmakers on both sides of the aisle and those in >between have known for years that the AMT would start >to affect middle- and upper-middle-income taxpayers >barring any permanent changes to the law, but they >nevertheless left it on the books. That means every >federal budget projection has factored in the amount >of revenue the AMT would raise once it starts hitting >non-wealthy taxpayers, and spending commitments were >made based on those projections. > >Tax 'carried interest' as ordinary income: Under >Rangel's bill, investment fund managers would have to >pay income taxes on the portion of their compensation >known as "carried interest." > >Carried interest is the managers' share of a fund's >profits and it is currently taxed as a capital gain at >15 percent. > >Key Democratic lawmakers have argued that carried >interest should be taxed as income because it really >represents a fee for service, not a reward for taking >an investment risk because managers don't necessarily >invest their own money in the funds they manage. > >The provision could effectively double the tax >managers pay on carried interest since ordinary tax >rates run as high as 35 percent. > >This provision is estimated to raise $26 billion over >10 years. > >The Private Equity Council said in a statement that >the proposal was unfair: "[T]those partners who invest >their time and effort to add value to an asset they >own -- the very people who often are mainly >responsible for any capital gains generated -- would >be taxed at ordinary rates. We do not believe that is >an equitable outcome." > >Tax cuts for corporations >Lower corporate tax rate: The bill calls for a >reduction in the top corporate income tax rate from 35 >percent to 30.5 percent. > >"A lower corporate tax rate is an unambiguous plus," >said Len Burman, director of the Tax Policy Center. > >In addition to those who always favor low taxes to >promote economic growth, others might like this >provision because "the lower the rate, the less >incentive there is [for companies] to avoid taxes," >Burman said. > >Tax hikes for corporations >Disallow a favorite accounting method: Rangel's bill >calls for a change in the way the inventories of >companies are valued, the net effect of which would be >a hike in their taxable income. > >Eliminate various corporate tax breaks: The complexity >of the corporate tax code is almost without measure, >in part due to the myriad tax deductions, credits and >other breaks that often favor some industries or >products over others. Rangel's bill calls for the >elimination of a host of those tax breaks. > >Combined with a lower corporate tax rate, the >streamlining of deductions promises "to make companies >more efficient economically," Burman said. Too often, >he explained companies will make economic decisions >based on tax rules rather than simply the conditions >of the market. Elimination of certain tax loopholes >"makes the system more fair," he said. > >Guard against potential transgressions: One provision >would give the IRS more leeway to impose penalties on >corporations that engage in sham transactions, said >Clint Stretch, managing principal of tax policy at >Deloitte Tax LLP. [ Next Thread | Previous Thread | Next Message | Previous Message ] |