A Tax Increase On The Rich Only: Do You Believe Those Words?
By: Guest Authors
By: Michael McNesy
The Alternative Minimum Tax (AMT) is expected to hit 23 million taxpayers when they file their returns at this time next year, for the tax year 2007
Bill Clinton’s tax increase of 1993 is the culprit for millions of taxpayers.
When President Clinton and the Democratic Congress raised the rates on the AMT, in 1993, they also failed to index for inflation. Only 300,000 tax payers, paid the AMT then.
If we were to go back to the rates prior to the tax increase, only 2.6 million taxpayers would be subject to the tax, next year, according to the Joint Tax Committee, (JTC).
Most of those 2.6 million are in the top 2%. Among the other 20 million plus, most are in the broad middle class, some well down the ladder in the middle class.
Beware of Democratic Spin
Since the Bush tax cuts, middle class families have saved an average of $2000 a year, despite the never ending Democrat falsehood of tax cuts for the rich.
However, because the 1993 tax increase failed to index for inflation, the AMT will now put the bite on millions of taxpayers for whom it was never intended.
The spin by Democrats, attempts to portray the Bush tax cuts, including the millions saved by the middle class, as having something to do with why more taxpayers will be paying the AMT.
If congress takes no action, those who become subject to the AMT for the first time, will still pay a lower tax because of the Bush tax cuts, after the addition of the AMT.
When Democrat spin starts, which it surely will, don’t be deceived.
Recall, that right up until his election, Bill Clinton promised a middle class tax cut.
Immediately upon taking office, he fulfilled that promise by raising gas taxes, income tax rates, Medicare payroll taxes, and taxes on many social security recipients.
If the Democratic congress would roll back the AMT rates to the pre-Clinton years, and index those rates, about 20 million
taxpayers, mostly middle class would escape a tax that was never intended for their level of purchasing power.
The original AMT was instituted due to Democrat hysteria in 1969 upon learning that 21 millionaires had paid no tax.
We’ve heard reference many times to the law of unintended consequences. Most of these laws come from feel good Democrat proposals that postulate about victims and inequality.
Democrats made many promises to the middle class in 2006, let’s see if actions speak louder than words.
Mick McNesby is a former tax advisor, consultant and negotiator. He was a frequent guest on political talk shows in Atlantic City, N.J., discussing the benefits of the lower cost of government.