thedrifter
10-30-07, 06:23 AM
The AMT Must Go
Stop the middle-class tax raid.
BY CHARLES B. RANGEL
Tuesday, October 30, 2007 12:01 a.m. EDT
Fundamental tax reform must begin with a repeal of a tax that is now hitting middle-class families and is threatening to grab back the benefits promised under the 2001 and 2003 tax cuts. I'm talking about the alternative minimum tax (AMT), and I've just introduced legislation to strike it from the tax code before it ensnares millions of middle-class Americans.
The AMT was first put in place in 1969 to ensure that the wealthiest among us weren't able to find enough loopholes in the tax code to avoid paying taxes entirely. But it has grown in the years since. This year alone, it is threatening 23 million taxpayers, including firefighters, teachers and others who were never intended to fall under its grasp.
The Bush administration is calling for permanent repeal of the AMT and has outlined plans for doing so as part of a comprehensive tax-reform package that won't cost the Treasury any revenue. My proposal meets the president's goal of a "revenue-neutral" reform and more.
My legislation would repeal the AMT, so that taxpayers will no longer have to fill out multiple tax forms, or wonder year after year whether they will be hit. My reforms would also provide economic security to taxpayers. They would allow millions of additional families to access the $1,000 child tax credit, raise the standard deduction, and expand access to the earned-income tax credit so that working adults will not face tax liability before reaching the poverty level. In total, the bill provides increased tax benefits to more than 90 million families. This is meaningful tax relief for those who need it most.
In order to achieve broad tax relief without increasing the national debt, this legislation restructures benefits provided at the upper income levels. The bill would also end the preferential and lucrative tax treatment currently enjoyed by private equity and hedge fund managers.
There is no justification for fund managers to continue receiving a lower, 15% tax rate on "carried interest," which is essentially compensation paid for the services they provide. By adjusting the top rates and reducing windfalls paid out to some of the wealthiest individuals in the nation, we can help restore a sense of equity and fairness that is critical to the success of our voluntary tax system.
Our corporate tax laws are also in need of simplification, as Treasury Secretary Henry Paulson recently highlighted. As foreign competitors lower tax barriers to encourage investment, America must modernize its laws to remain a business-friendly, competitive nation.
In order to create an environment that allows American businesses to compete and win internationally, I propose a significant reduction in the corporate marginal tax rate, and a removal of incentives for businesses to move jobs overseas. The legislation will also repeal narrowly targeted tax breaks that have limited value, can often be cumbersome for companies to realize and, in some instances, have outlived their original intent.
Tax reform will not be achieved overnight. However, this package should bring even the most partisan conservatives to the table for an overdue debate on the future of our nation's tax policies. This nation must come to grips with the repercussions of recent fiscal irresponsibility.
Opponents will attack my reforms by labeling them a tax increase. This false rhetoric ignores the tax cuts that would be provided to some 90 million Americans as well as the Joint Committee on Taxation's Determination that the bill is revenue-neutral. Some of my Republican friends have even suggested financing of tax reform with a round of tax cuts that are not paid-for. Supporters of this approach should have the courage to lay out a precise plan for how they will pay for the ongoing war in Iraq, the commitments to our veterans, much-needed improvements in our infrastructure. and investments in our health-care and education systems.
The introduction of my bill marks the start, not the end, of the legislative process. Tax reform requires painful choices and my bill reflects that reality. But those who would attack my bill without suggesting alternatives are in the posture of defending the status quo, a posture that is outside the mainstream desires of the American people and the bulk of the business community.
Over 20 years ago, my former colleague and then-chairman of the Ways and Means Committee, Dan Rostenkowski, delivered a speech on his desire to enact tax reform. In response, then Treasury Secretary James Baker sent the chairman an audio recording of "They're Playing Our Song." The response from the Bush administration and my Republican colleagues in Congress to the bill I have introduced may illustrate just how far they have strayed from the reform tendencies of the Reagan administration.
While it is regrettable that Congress and the administration have not worked together in recent years to enact bipartisan tax reform, we must not miss this opportunity to simplify our tax code and put money back in the pockets of America's working families.
Mr. Rangel (D., N.Y.) is chairman of the House Committee on Ways and Means.
Ellie
Stop the middle-class tax raid.
BY CHARLES B. RANGEL
Tuesday, October 30, 2007 12:01 a.m. EDT
Fundamental tax reform must begin with a repeal of a tax that is now hitting middle-class families and is threatening to grab back the benefits promised under the 2001 and 2003 tax cuts. I'm talking about the alternative minimum tax (AMT), and I've just introduced legislation to strike it from the tax code before it ensnares millions of middle-class Americans.
The AMT was first put in place in 1969 to ensure that the wealthiest among us weren't able to find enough loopholes in the tax code to avoid paying taxes entirely. But it has grown in the years since. This year alone, it is threatening 23 million taxpayers, including firefighters, teachers and others who were never intended to fall under its grasp.
The Bush administration is calling for permanent repeal of the AMT and has outlined plans for doing so as part of a comprehensive tax-reform package that won't cost the Treasury any revenue. My proposal meets the president's goal of a "revenue-neutral" reform and more.
My legislation would repeal the AMT, so that taxpayers will no longer have to fill out multiple tax forms, or wonder year after year whether they will be hit. My reforms would also provide economic security to taxpayers. They would allow millions of additional families to access the $1,000 child tax credit, raise the standard deduction, and expand access to the earned-income tax credit so that working adults will not face tax liability before reaching the poverty level. In total, the bill provides increased tax benefits to more than 90 million families. This is meaningful tax relief for those who need it most.
In order to achieve broad tax relief without increasing the national debt, this legislation restructures benefits provided at the upper income levels. The bill would also end the preferential and lucrative tax treatment currently enjoyed by private equity and hedge fund managers.
There is no justification for fund managers to continue receiving a lower, 15% tax rate on "carried interest," which is essentially compensation paid for the services they provide. By adjusting the top rates and reducing windfalls paid out to some of the wealthiest individuals in the nation, we can help restore a sense of equity and fairness that is critical to the success of our voluntary tax system.
Our corporate tax laws are also in need of simplification, as Treasury Secretary Henry Paulson recently highlighted. As foreign competitors lower tax barriers to encourage investment, America must modernize its laws to remain a business-friendly, competitive nation.
In order to create an environment that allows American businesses to compete and win internationally, I propose a significant reduction in the corporate marginal tax rate, and a removal of incentives for businesses to move jobs overseas. The legislation will also repeal narrowly targeted tax breaks that have limited value, can often be cumbersome for companies to realize and, in some instances, have outlived their original intent.
Tax reform will not be achieved overnight. However, this package should bring even the most partisan conservatives to the table for an overdue debate on the future of our nation's tax policies. This nation must come to grips with the repercussions of recent fiscal irresponsibility.
Opponents will attack my reforms by labeling them a tax increase. This false rhetoric ignores the tax cuts that would be provided to some 90 million Americans as well as the Joint Committee on Taxation's Determination that the bill is revenue-neutral. Some of my Republican friends have even suggested financing of tax reform with a round of tax cuts that are not paid-for. Supporters of this approach should have the courage to lay out a precise plan for how they will pay for the ongoing war in Iraq, the commitments to our veterans, much-needed improvements in our infrastructure. and investments in our health-care and education systems.
The introduction of my bill marks the start, not the end, of the legislative process. Tax reform requires painful choices and my bill reflects that reality. But those who would attack my bill without suggesting alternatives are in the posture of defending the status quo, a posture that is outside the mainstream desires of the American people and the bulk of the business community.
Over 20 years ago, my former colleague and then-chairman of the Ways and Means Committee, Dan Rostenkowski, delivered a speech on his desire to enact tax reform. In response, then Treasury Secretary James Baker sent the chairman an audio recording of "They're Playing Our Song." The response from the Bush administration and my Republican colleagues in Congress to the bill I have introduced may illustrate just how far they have strayed from the reform tendencies of the Reagan administration.
While it is regrettable that Congress and the administration have not worked together in recent years to enact bipartisan tax reform, we must not miss this opportunity to simplify our tax code and put money back in the pockets of America's working families.
Mr. Rangel (D., N.Y.) is chairman of the House Committee on Ways and Means.
Ellie