Editorial: GOP wants to leave no rich person behind

Democratic lawmakers are about to target a portion of the Alternative Minimum Tax (AMT) that impacts many middle class Americans.  Republicans like Senator Charles Grassley (R-IA) are dead-set against repealing part of that tax.  Why?  We will get to that in a minute.  But first, as quickly as I can, let me summarize the AMT.

Originally, the AMT was part of the Income Tax Reform Act of 1969.  It was intended to target 155 wealthy households that had been eligible for so many tax loopholes that they barely owed any money.  But over time the ALT began affecting many middle class families because it was not adjusted for inflation, and also due to changes in the tax codes in a number of states.

In 2004, the IRS' National Taxpayer Advocate released a report that found the AMT represented the number one problem with our tax code, and needed to be reformed because of its impact on an increasing number of middle class families.  Last year, it affected 3.4 million taxpayers.  This year, 23 million.  By 2010, the tax will impact as many as 30 million Americans, and will continue to increase from there.

Therefore, led by Congressman Charles Rangel (D-NY), the Democrats are about to propose a bill that would shield those making $250,000 or less from paying the AMT.

But Republican Charles Grassley is just fuming about the idea.  A few days ago he warned that shielding just middle class Americans from the tax would result in a "shocking" tax increase for the wealthy.

So what does Grassley want?

It's quite simple.  Grassley actually supports repealing the AMT -- but not if it only includes those making $250,000 or less.  He wants everyone to get the cut.  Should Grassley get his way, it would defeat the whole purpose of the AMT in the first place: to prevent the wealthy from finding enough tax loopholes that they owe next to nothing.

Lastly, according to the LA Times, if we repeal the entire AMT, it would add about $1 trillion in debt to our treasury for future generations.  Taxes have a purpose.  They bring in revenue.  They help government function.  So why not seek a middle ground, as Rangel is trying to do?  Repeal the tax for those that cannot afford it, but keep it in place for the rest because we need the revenue.  Plus, you have to admit that even with the AMT in place, there are enough tax loopholes for the investor class anyway.  Why add another?

Comments

[George]

If it weren't for people like Grassley, the wealthiest, most influencial, most powerful people (in the wealthiest, most powerful society ever constructed) would have almost no one to stand up for them. It would be very sad times indeed.