http://www.nasdaq.com/aspxcontent/N...CQDJON200710242253DOWJONESDJONLINE001107.htm& [rquoter] UPDATE:Rangel Tax Plan's Centerpiece Is 30.5% Top Corp Rate (Updates with source saying all industries included in proposal to tax financial managers' carried interest as regular income) By John Godfrey OF DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- Corporations would see their top tax rate cut to 30.5% from 35% under a tax plan unveiled Wednesday by House Ways and Means Committee Chairman Charles Rangel, D-N.Y., to fellow committee members. Rangel plans to publicly announce the plan Thursday morning. To offset the cost of the lower tax rate, the plan would alter a number of business tax provisions, according to lawmakers, congressional staff and lobbyists familiar with the plan as outlined Wednesday night. The plan will repeal a tax deduction for domestic manufacturers. It will prevent companies from using an accounting method known as last-in, first-out, or LIFO, that can cut their taxes during times of rising prices. Repealing LIFO could result in a substantial tax for companies currently using the method, but aides briefed on the plan say the change would be phased in over eight years, thereby blunting the initial impact. The plan would also require companies to defer deductions for certain expenses of foreign subsidiaries of U.S. companies until the money is repatriated to the U.S. A lobbyist tracking the bill said the provision would likely hurt those who benefited most from an October 2004 Act allowing a one-time amnesty to repatriate foreign income at reduced tax rates. Companies lobbied for the break arguing they would be able to use the money to create new jobs, but there has been little evidence to suggest that is what happened. "That's going to get thrown into their faces," the lobbyist said. Middle and upper-middle income families would benefit under the plan by a repeal of the alternative minimum tax starting Jan. 1, 2008. Upper-income families, however, would pay for that repeal with a 4% surtax on incomes above $150,000 for a single earner or incomes above $200,000 for a married couple. That surtax would grow to 4.6% for incomes above $500,000. The surtax will also make possible an expansion of the earned income tax credit, an increase in the standard deduction, and an increase in the value of the child tax credit for those earning too little to owe federal income taxes. A third section of the plan would address a number of pressing tax issues, including a temporary patch of the alternative minimum tax prior to Jan. 1, 2008, and the extension of a number of expiring tax provisions. Absent a patch, the alternative minimum tax will expand to hit roughly 25 million taxpayers, up from 4.4 million in 2006, increasing their taxes by a total of nearly $50 billion, according to congressional estimates. Expiring tax breaks, known colloquially on Capitol Hill as "extenders," include the research-and-development tax credit, tax breaks for teachers buying schools supplies and a deduction for state and local sales taxes. Part of the cost of the third section of the bill would be offset by taxing carried interest paid to financial managers as regular income and not as capital gains. While some said the change wouldn't apply to real estate investment trust managers, a source familiar with the plan said all industries are included. Revenue-raising measures in this third section also include a tax on deferred compensation plans of offshore hedge funds and a requirement that financial service providers give customers information on basis of sold securities. The plan also changes current laws to require small businesses in the services sector to pay payroll taxes for their workers. Rangel doesn't expect his plan to come to a vote before the House this year. But the third section of temporary provisions will be stripped from the plan and introduced as a separate bill next week. Rangel said Wednesday night he may disaggregrate the bill further, splitting the third section into an AMT patch bill and an extenders bill, both with separate revenue offsets. This two-bill approach could help Senate Democrats maintain fiscal discipline. Lawmakers there are balking at raising revenues to offset the cost of the AMT bill. Separating the extenders from the AMT bill, therefore, could protect the extenders from getting stuck in that fight, Rangel said Wednesday night. [/rquoter]
Did you even read what your posted? You should love this. Lower corporate taxes, eventual elimination of the AMT, tax cuts for 90 million people, closing of loopholes the treasury department wants closed, etc ...
I like how he chose to not highlight the 3 prior sentences, in some kind of bizarre attempt to suggest that the tax bill is doing the exact opposite of what it is. It's almost like he has no interest in an actual discussion of the bill.
The elimination of the AMT is a great idea, it's an idea that totally backfired for many reasons and does the opposite of what it was originally intended. It also one that most democratic legislators would probablly get behind as it tends to hit people in high cost of living, urban areas (i.e. democratic ones). Shockingly, during the last 10 years of Republican congresses, the hardcore anti-tax , Grover Norquist crowd did almost nothing about the AMT (oh except for a "tax patch!" lol, that's like software upgrade that expires. Republican house leadership shepherded through this controversial initiative at a razor thin margin of 414-4 voting) . and instead gave the lion's share of breaks to the super rich who employ shelters to avoid AMT, who also happen to be the people to whom it was orignallyl intended to cover, rather than a two-income family in New Jersey with three dependents who ends up getting hit by the AMT simply because their property taxes went up.
This is the type of economic devastation you can expect from voting the liberals into office. Their policies, if enacted, would without question lead to an economic depression. http://republicans.waysandmeans.house.gov/News/PRArticle.aspx?NewsID=133 Memo: McCrery on "Mother of All Tax Hikes" October 25, 2007 By Ways and Means Republican Press Office MEMO RE: “Mother of All Tax Hikes” Bill TO: Republican Members, Republican Staff FROM: Ways and Means Committee Ranking Member Jim McCrery My Friends, At a bipartisan Ways and Means caucus last night, Chairman Rangel outlined his long-awaited “Mother of All Tax Hikes” legislation. The basics of the package are simple: This is the largest individual income tax increase in history. The bill will add a 4% surtax on Americans earning more than $150,000 a year ($200,000 for couples). That is on top of the scheduled expiration of the 2001 and 2003 tax cuts. So, under Democrats’ plan, over the next few years, the individual income top tax rate in the United States will rise from 35% to 44%. By way of comparison, the other 29 Organization for Economic Co-operation and Development countries – basically other developed nations - have an average top marginal tax rate of 35.7%. In fact, only five OECD countries would have higher top marginal tax rates in 2011 than the United States if the Democrats’ bill is enacted. This crushingly high tax rate will affect approximately 10 million taxpayers directly - including those who report business income, like small business owners and farmers - but the damage will ripple throughout our economy. Because small businesses and family farms often pay their income taxes as individuals, this is a massive tax hike on the engine that drives job growth in this country. In addition, the surtax is on adjusted gross income, not taxable income. This sounds like a technical issue, but it means that Rangel’s bill will erode the value of a series of tax deductions – including for mortgage interest, charitable giving, medical expenses, state and local taxes, and the standard deduction. And, because the surtax kicks in at $150,000 for individuals and $200,000 for couples, the bill creates a monster of a marriage penalty. Chairman Rangel will claim that these tax increases go to provide tax cuts to 90 million Americans, but he is selling pure snake-oil. Many if not most of those taxpayers are getting a purely imaginary “tax cut.” Some of them are the roughly 20 million people that Republicans shielded with the Alternative Minimum Tax patch. Millions more are people who have benefited from the 2001 and 2003 tax cuts, and only get “tax cuts” if you assume that the 10% bracket, marriage penalty, and $1,000 per child tax credit will expire. Others, like single people who will now be eligible for the Earned Income Tax Credit, are getting a tax refund from the government even though they don’t actually pay income taxes. It will take time to analyze this bill and sort through the data, but we know from the start that the 90 million figure is pure hokum. In fact, before you know it more taxpayers may wind up paying higher taxes – and fewer paying less - under Rangel’s plan than they did last year. Which brings us to the larger fallacy of the Democrats’ “paygo” system. There is no need to “pay for” protecting taxpayers from a massive AMT tax hike. The government never meant for the AMT to affect middle-class Americans, and we have a responsibility to make sure it doesn’t. By arguing that preventing this tax increase requires us to raise taxes elsewhere, Democrats are trying to lock Congress into a system where we are guaranteed to raise taxes by $3.5 trillion over ten years. That’s right. $3.5 trillion. The baseline that the Democrats are using for “paygo” includes revenue from an “un-patched” AMT and from the tax increases that occur when the 2001 and 2003 tax laws expire after 2010. Together they total $3.5 trillion over ten years. If we play by the Democrats “paygo” rules, that is the size of the tax increase we are imposing on the American people. That will hurt our nation’s competitiveness and cost us American jobs. The Rangel bill is the first step down a road none of us want to follow, and I urge you to oppose it strongly.
Not a big fan of 4% surtax over 200k, that's not hitting the super rich, that is hitting the two-income family in New Jersey with three dependents. Sam you live in NYC, you should know that.
I didn't say anything about the 4% surtax. I was talking about AMT - anyway - ANYTHING, even a 4% surtax that is indexed to infaltion is better than AMT which will keep reaching lower and lower down on the chain due to its structural deficiencie, namely because it is not indexed to inflation.
You have to raise revenue somehow. We can't keep running these spectacular deficits. I'm all for doing away with the AMT, but I agree that the income targets mentioned here should be hiked up. More people make that kind of money than people realize, and the cost of living is far higher in large parts of the country than it is in Texas. We don't have the most uninsured Americans of any state and kids without health insurance for nothing. D&D. Attempt to Keep it Civil! Impeach Bush.
Um, how about through economic growth, which is EXACTLY what we have seen. The problem with this mother of all tax hikes is that it will restrict growth and ultimately end up lowering tax receipts. This is truly an economic disaster in the making. Charlie Rangel is a threat to our standard of living, and knows practically nothing about how to make sound financial decisions.
Trader_J, it hasn't been working. The dollar is incredibly weak right now, and you would think we'd be running a trade surplus, yet we're not. The sub-prime crisis is still hitting hard, and you have to wonder how that will play out. I think there has to be more "balance" in our tax rates. The wealthy have had a heck of a ride for several years and it's time to help the middle class for a change. I think the incomes levels below which this "surtax" (whatever the hell that means... it's a tax!) doesn't hit are too low. A lot of the middle class in parts of the country would be hit by 150-200K. I would bump that up at least 50K, or more. D&D. Attempt to Keep it Civil! Impeach Bush.
Deckard, it is working. Tax receipts have increased as a direct result of tax cuts. This has been vetted here in this forum before and proved to be correct with hard data. Economic growth is the best way to increase tax receipts. Period. Tax hikes stifle economic growth. If you truly believe the regurgitation of headlines that you probably read on CNN.Money or some equivalent site for financial novices, then why hurt the economy with tax hikes if you think it's already hurting? Try answering that. HO HO HO
Atta boy! Already using the "mother" line after one post from a Repub politician. Way to stay on message. Anyway, Rangel claims the tax changes are revenue neutral. If it is, explain how not raising taxes leads to economic disaster. If not, explain why Rangel's plan is not revenue neutral. Thanks.
I think if you are waging a war, and we are waging at least two, there should be sacrifice, and we need to pay for it. Under Bush, the only people sacrificing are the military and their families. I can't think of a time when we have had a major conflict and cut taxes. Perhaps someone could enlighten me. D&D. Attempt to Keep it Civil! Impeach Bush.
pull up that article you referenced the last time we had this discussion and read it again TJ... READ IT ALL THE WAY THROUGH... then realize that you are wrong... that is all...
LOL! That's a good one. This table's from the President's FY2008 Budget... http://www.whitehouse.gov/omb/budget/fy2008/summarytables.html So, unless you're going to give Congress credit for reigning in Bush's spending during his last year or you're prepared to suspend the 2008 election and have Bush serve through 2012, your assertion is wrong.
