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POLITICS: 27 Million in US To See Tax Bill Rise

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posted on Dec, 20 2004 @ 11:24 AM
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Tax rhetoric, particularly the bait & switch variety that ascribes 'tax relief' to Republican dogma and 'raised taxes' to the Democrat side, had been amply represented in the build up to the 2004 vote. Much of what was discussed by the incumbent administration left those of us who could realistically 'do the math' wondering how such grandiose & broad brush measures would all fit within the same fiscal mural: big tax cuts next to increased spending next to further military commitments. Well, they don't fit, and while many voted thinking the rhetoric as gospel, the chickens have come home to roost. By virtue of the formula used to compute the Alternative Minimum Tax and recommended measures by the Administration with the GOP Congress, specifically the deductions for high state & local taxes, some 30 million American, most earning under $100,000, will see a large tax increase by 2010.
 



www.boston.com
President Bush has told Treasury officials he wants to eliminate the Alternative Minimum Tax, because it stands to raise the taxes of so many people. But his administration is searching for ways to make up $1 trillion in lost revenue. One idea being discussed in the administration and Congress eliminating $900 billion worth of deductions for state and local taxes also would hit Massachusetts particularly hard, given the states relatively high state taxes and property levies.
The Alternative Minimum Tax was first applied in 1969 and updated on numerous occasions. Intended to assure that wealthy taxpayers cant escape liability by seeking tax shelters and deductions, it sets a formula that applies a new system of levies on those with relatively high incomes and relatively low tax bills. But several factors have resulted in the alternative minimum hitting more taxpayers than just the wealthiest Americans. The AMT lacks an inflation index, which means that even if incomes grow only by the rate of inflation more people make enough money to owe the tax. In addition, the Bush tax cuts have reduced rates for some families enough to throw them into the alternate minimum, thus wiping out some of the benefits of the tax cuts. As a result, a family that takes deductions for children and state and local taxes is becoming more likely to be affected by the minimum tax.
Some Republicans have suggested leaving the minimum tax in place because those hardest hit tend to be in states that did not support Bush, including Massachusetts, California, and New York. It is a tax of people living in blue states, said Grover Norquist, the conservative activist who heads Americans for Tax Reform.


Please visit the link provided for the complete story.


They giveth and they taketh away. It's interesting to see the multiple layers of this strategy being applied, both by the capriciousness of unplanned ideology backfiring and a scramble to make something advantageous of it, or by the long planned option of forcing the oppositions hand by circumstance.
In the former, unplanned for debt of $1 Trillion has caused the need to find some strategy to make up the lost revenue - scraping the state & local tax deductions accomplishes that in near entirety. On the latter, a longer term strategy has possibly been applied: give the appearance of the ideological mantra, 'tax relief', to the masses. Then you pull it away by virtue of the out of date AMT formula, working it to a leveraged advantage whereby it can now be argued that because of the broad tax duress, the AMT must be abolished, thus serving the group folks like Grover Norquist & the Bush clan have been catering to all along: the very wealthy.
Sometimes hubris tips you off to which strategy is the real one: "The minimum tax should be repealed only when Democrats say they are sorry and offer to give us something in return, Norquist said.
Another interesting portion of the article:The 10 states with the highest percentage of people paying the minimum tax all voted for Senator John F. Kerry of Massachusetts for president last month, according to an analysis by Citizens for Tax Justice. But the state with the 11th highest percentage was Ohio, the state that went narrowly for Bush and decided the election.
Payback truly is a "female dog", huh?




posted on Dec, 20 2004 @ 12:45 PM
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Nice twist thought I was reading an action scene from the Matrix for a moment there.

Questions:

Is the unintended consequences not the fault of those responsible for instituting the AMT in the first place?

Just when was the AMT instituted?

By Whom?

For what specific purpose?



And what are the consequences today?



posted on Dec, 20 2004 @ 01:10 PM
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Any law in action today has been studied for fortification by those who think it's a good one, and for loopholes or levarage points for those who think its bad.

Now, from what the chief Neo-Con expert on Taxation had to say, I think we can see which side the party & administration come down on regarding AMT:

It is a tax of people living in blue states, said Grover Norquist, the conservative activist who heads Americans for Tax Reform.
He said the tax was originally conceived by liberal Democrats as a way of imposing higher taxes mostly on wealthier Republicans, and he suggested that it be used as a bargaining chip by the White House when Bush tries to enact his tax agenda. The minimum tax should be repealed only when Democrats say they are sorry and offer to give us something in return, Norquist said.


As a point of reference, anyone to the left of William F. Buckley, Norquist considers a "liberal". Yes, it's a knee jerk reaction to start the Liberal diatribe, since something Republican is sited for potential diliberate malfesance, again. It brings light to the fact that you assume the wealthy are void of mechanism to evade & shelter their wealth? That Norquist's position is verbatim valid? That Robber Barons never existed in American history & have not been trying ( and succeeding ) in rising again?

But step back, soak it in, and see it for a dangling of the bishop while the knight angles into position.



posted on Dec, 20 2004 @ 01:37 PM
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Originally posted by Phoenix
Nice twist thought I was reading an action scene from the Matrix for a moment there.

Questions:
Answered these myself since the thread author refused

Is the unintended consequences not the fault of those responsible for instituting the AMT in the first place?
Yes they put no mechanism for inflation virtually garanteeing a future "hit" on the middle class.

Just when was the AMT instituted?
1969

By Whom?
Democrats

For what specific purpose?
To soak the rich, ok ok - it was to prevent those that used shelters from avoiding taxes.


And what are the consequences today?
As income rises with inflation middle class people are hit with a higher tax liability


BT the democrats technically did do this to themselves because of lack of foresight.

Now you are trying to use the AMT as a political hammer against Bush who had nothing to do with its formulation or passage. This has nothing to do with the current round of tax cuts and everything to do with a federal government grown fat on our backs.

State governments are just as guilty because they count on their citizens aquiecence in offsetting their high rate of taxation by having citizens paying federal taxes subsidizing bloated state government.

Should the blue states be penalized for taking advantage of a skewed and unjust system as Norquist suggests - No not in my opinion nor the opinion of the administration itself from what I read in your link.

Lets face it this entire tax system is due for a major overhaul - your post aptly points out why as far as I'm concerned.





[edit on 20-12-2004 by Phoenix]



posted on Dec, 20 2004 @ 02:52 PM
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The Dem/Repub thing for some is as impossible to let go as the Yankee/Johnny Reb symantics.
Phoenix, whether you like it or not, it's you that it's beeing done to, along with the other Rank & File Republicans and all other Americans. The measures being taken or proposed do nothing to draw equality amongst the classes; it furthers it.
The system is being coerced and manuevered by Republicans on this issue, in my opinion. It's a further extenstion of the "Death Tax" canard, just better thought out.


Now you are trying to use the AMT as a political hammer against Bush who had nothing to do with its formulation or passage.


To the contrary, what Team Rove has taken advantage of is just this sort of thing; long standing legalities that can be manipulated in modern terms - none of which they formulated or had passed. It's a moot point at to the culpability of the actions.


Should the blue states be penalized for taking advantage of a skewed and unjust system as Norquist suggests - No not in my opinion nor the opinion of the administration itself from what I read in your link.


Being a Blue Stater, I don't get where you're coming from? You think the states were playing the system to give their citizens credits against high/double taxation!?

I agree about tax reform. Where I disagree is on the classes focused upon for increas/decrease by this administration and the GOP.



posted on Dec, 20 2004 @ 07:41 PM
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Originally posted by Bout Time
The Dem/Repub thing for some is as impossible to let go as the Yankee/Johnny Reb symantics.


Tell me about it - thats how your article is premised no mattar how you turn your phrase



Phoenix, whether you like it or not, it's you that it's beeing done to, along with the other Rank & File Republicans and all other Americans. The measures being taken or proposed do nothing to draw equality amongst the classes; it furthers it.


BT I do not believe now nor have I ever believed in progressive tax rates after the poverty level has been passed - you are wasting words with me if you are equating equality with progression. Sorry but my tax rate should be the same whether I make $30,000 or $3,000,000 million



The system is being coerced and manuevered by Republicans on this issue, in my opinion. It's a further extenstion of the "Death Tax" canard, just better thought out.


Again, if you believe progression is equitable then I can see someone saying this



Now you are trying to use the AMT as a political hammer against Bush who had nothing to do with its formulation or passage.

To the contrary, what Team Rove has taken advantage of is just this sort of thing; long standing legalities that can be manipulated in modern terms - none of which they formulated or had passed. It's a moot point at to the culpability of the actions.


At this point BT this is only conjecture on your part with nothing to back it but your opinion based on one very far right wing person (Norquist) and you've already got Rove and the administration hip deep in it because of a piece of defective tax legislation passed 35 years ago. BT you go from calling this administration bumpkins led by an ignoramous to calling it the most needle sharp bunch of conspiracy makers the world has ever seen - which way is it? by the way


Should the blue states be penalized for taking advantage of a skewed and unjust system as Norquist suggests - No not in my opinion nor the opinion of the administration itself from what I read in your link.


Being a Blue Stater, I don't get where you're coming from? You think the states were playing the system to give their citizens credits against high/double taxation!?


Exactly if one shirks off high state taxes as a deduction on federal taxes (especially those that recieve refunds) then why be concerned with the high state tax rate - its a politicians dream money machine. Correct me if I'm wrong but is it not the big blue states that also have the countries highest tax rate? But conversely not the countries best level of governmental services delivered to the consumer dollar for dollar.



I agree about tax reform. Where I disagree is on the classes focused upon for increas/decrease by this administration and the GOP.


BT I am not rich by any standard but I see no justice in making someone who is pay any more percentage in taxes than I do.

Your sense of justice seems to say that they should.

I call that penalizing success


Now if you want to say should the rich pay more into charity (without the deductions please) or contribute to the community voluntarily then I would agree - just so long as it is not at the point of a gun.


[edit on 20-12-2004 by Phoenix]



posted on Dec, 20 2004 @ 08:56 PM
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Originally posted by Phoenix
BT I do not believe now nor have I ever believed in progressive tax rates after the poverty level has been passed - you are wasting words with me if you are equating equality with progression. Sorry but my tax rate should be the same whether I make $30,000 or $3,000,000 million



I'll go along with that as long as no one has to pays taxes on the first $15,000 of income. The middle class is shrinking fast enough, thank you very much.
I have no problem with the rich being taxed at the same rate, as lonas it is fair and not rich with loop holes.
And NO flat tax, I could NOT afford to have my taxes go up that much.



posted on Dec, 21 2004 @ 06:10 AM
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If our current tax code allows someone that is ultra-rich such as Teresa Heinz to pay 12.5% (just using her because shes such a good example) while many earning middle incomes pay 28 - 36% shows that what BT wants to keep in place already benefits the rich to a great degree.

Obviously she has found a way around the AMT and if she has so have many others at her ultra-rich income level.

Is the AMT really targeting those whom you think should pay the most or is it hitting the middle and upper-middle income group disproportionately?

If this is the case then it should be scrapped.

I personally am in favor of consumption tax with sales tax refunds to those in the near poverty or low income brackets. From what I've read most of the low incomers would actually get a net increase in total income from this type of system.

On the other side of the equation the receipt of government funds from entitlement programs needs to have means testing put in place to check the rampant rise in cost to all taxpayers.

SS is a good example, someone who has cash assets in the millions but makes no income still gets a full check - why?

On the otherhand lets say there is a divorcee who was financially wiped out that is now 70 and makes an income from a job that pays $29,000 a year, she loses SS benefits due to the paltry income. - wheres the equity in that?

In the first example of SS benificiary is it "need or greed" drives the benefit.

The current tax system is just as inequitable being based on income rather than ability to pay for higher consumption.

With absolutely no loopholes this would be much fairer to all.




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