A Morsel Too Juicy
The Indianapolis Star wrote a short editorial in favor of eliminating the Alternative Minimum Tax or AMT today. I, for one, agree with them. Despite the vaunted tax cuts of the current Administration, the AMT continually eats a greater and greater chunk of those of gains.
Established as a way to stick it to a miniscule number of millionaires who were able to evade paying tax through crafty use of the tax code, the AMT last year ensnared, according to the Star, 3.6 million Americans and threatens to affect 20 million this year. That includes a large number of people earning less than $100,000 a year, but who are smarter than the rest of us at navigating the Byzantine tax code. It is precisely the nightmare scenario I would expect from “do-gooder” legislation that was designed to gouge a few. The law of unintended consequences reigns supreme. How many more of us will eventually be subsumed into this tax monster is anyone’s guess, but at this time, Congress appears unable or unwilling to stop it.
The question unasked is why? Why would Congress, with such obvious evidence before them that this tax hurts people it was never even intended to apply to, allow the AMT to continue to exist, or not have included such a simple fix as adjusting for inflation? Leaving aside that the tax is an immoral, leftist way of sticking it to people Congress feels don’t deserve the money they’ve earned, why wouldn’t Congress think of the little guy?
The answer to that is both simple and complex all at the same time. Congress will never independently repeal a tax that earns money. The only way they will is if they are forced by public opinion and a strong executive and then the desire usually is a temporary repeal. Congress also is full of individuals, many millionaires themselves, who seem to have it in for those who succeed in business and don’t “give back their fair share”. The reason for this is, the House and Senate are infected with a “socialism is best” mentality for the country and the AMT fits that like a glove. Nothing that not only is a proven money-maker but so clearly a tool of “soft communism” wealth-redistribution would ever be tossed out by the diseased in those bodies. Of course, I don’t mean every Congressman, but the majority appears to hold this position.
The House and Senate have also had years to address this plan and won’t even let a little band-aid like halting expansion to pass out of conference, because it makes such a juicy bargaining tool for other legislation. The Bush administration claims they want the AMT gone, but they won’t stake out the political capital to do it. They seem happy to rest on their current tax-cutting laurels. This perhaps goes further to exhibit that the Bush administration has never been that fiscally conservative. They don’t want to get rid of such taxes anymore than the Congress does.
Still, the people desperately want the repeal, so what to do? Congress and the White House will beat the drums and carp to excess that they want to see the AMT gone, but they will treat it as nothing more than a minor campaign promise, the kind that never gets fulfilled. The only way to make sure anything is done is to tie it to the power of the ruling party. I guarantee you the Democrats will never even publicly consider repealing the AMT, so that leaves the Republicans and their lip-service to tax reform. It must be made more potent and unfortunately it is up to us the citizenry to make that more the case. This tax needs gone in the worst way, and until something can be done to stave off the opportunistic desires of the government, the AMT is here to stay.
The Indianapolis Star wrote a short editorial in favor of eliminating the Alternative Minimum Tax or AMT today. I, for one, agree with them. Despite the vaunted tax cuts of the current Administration, the AMT continually eats a greater and greater chunk of those of gains.
Established as a way to stick it to a miniscule number of millionaires who were able to evade paying tax through crafty use of the tax code, the AMT last year ensnared, according to the Star, 3.6 million Americans and threatens to affect 20 million this year. That includes a large number of people earning less than $100,000 a year, but who are smarter than the rest of us at navigating the Byzantine tax code. It is precisely the nightmare scenario I would expect from “do-gooder” legislation that was designed to gouge a few. The law of unintended consequences reigns supreme. How many more of us will eventually be subsumed into this tax monster is anyone’s guess, but at this time, Congress appears unable or unwilling to stop it.
The question unasked is why? Why would Congress, with such obvious evidence before them that this tax hurts people it was never even intended to apply to, allow the AMT to continue to exist, or not have included such a simple fix as adjusting for inflation? Leaving aside that the tax is an immoral, leftist way of sticking it to people Congress feels don’t deserve the money they’ve earned, why wouldn’t Congress think of the little guy?
The answer to that is both simple and complex all at the same time. Congress will never independently repeal a tax that earns money. The only way they will is if they are forced by public opinion and a strong executive and then the desire usually is a temporary repeal. Congress also is full of individuals, many millionaires themselves, who seem to have it in for those who succeed in business and don’t “give back their fair share”. The reason for this is, the House and Senate are infected with a “socialism is best” mentality for the country and the AMT fits that like a glove. Nothing that not only is a proven money-maker but so clearly a tool of “soft communism” wealth-redistribution would ever be tossed out by the diseased in those bodies. Of course, I don’t mean every Congressman, but the majority appears to hold this position.
The House and Senate have also had years to address this plan and won’t even let a little band-aid like halting expansion to pass out of conference, because it makes such a juicy bargaining tool for other legislation. The Bush administration claims they want the AMT gone, but they won’t stake out the political capital to do it. They seem happy to rest on their current tax-cutting laurels. This perhaps goes further to exhibit that the Bush administration has never been that fiscally conservative. They don’t want to get rid of such taxes anymore than the Congress does.
Still, the people desperately want the repeal, so what to do? Congress and the White House will beat the drums and carp to excess that they want to see the AMT gone, but they will treat it as nothing more than a minor campaign promise, the kind that never gets fulfilled. The only way to make sure anything is done is to tie it to the power of the ruling party. I guarantee you the Democrats will never even publicly consider repealing the AMT, so that leaves the Republicans and their lip-service to tax reform. It must be made more potent and unfortunately it is up to us the citizenry to make that more the case. This tax needs gone in the worst way, and until something can be done to stave off the opportunistic desires of the government, the AMT is here to stay.
posted by Rob Beck | 6:22 PM
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