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Thursday, November 10, 2005

House GOP: Yes on Tax Cuts for Rich, No on Middle Class Tax Cuts

With the amended budget bill -- particularly the stalling version in the House -- the Republican Party has shown a willingness to cut programs for the poor in able to partially finance more tax cuts for the wealthy (the balance of the tax cuts being offset by further borrowing). As unpopular as this policy is among some camps, it seems that the Republicans are poised to make an even less popular move on tax cuts. The AP's tax writer Mary Dalrymple has the story.

The House's top tax writer introduced a bill Thursday that would allow the alternative minimum tax to hit millions more taxpayers next year.

House Ways and Means Committee Chairman Bill Thomas opted to use tax cuts allotted in the GOP's budget to extend tax cuts for capital gains and dividends for two years instead of holding back the alternative minimum tax.

Thomas, R-Calif., said last week that preventing the alternative minimum tax, or AMT, from spreading deeper into the middle class next year could drain the energy from efforts to overhaul the nation's tax laws.

[...]

The alternative minimum tax aims to prevent wealthy individuals from avoiding all taxation. The annual effects of inflation have brought it closer to less wealthy taxpayers each year. Those with several children and those who live in states with high income and property taxes are more likely to feel its pinch.

Lawmakers routinely enact temporary patches to restrain it. More than 20 million taxpayers can expect to pay the alternative minimum tax next year without that temporary fix.
If Republicans really believe that it's good policy to make tax cuts for the extremely wealthy while allowing the tax rates on the middle class to artificially grown -- and cutting services for the working and middle classes -- they should go ahead and try it. On Tuesday, voters across the country showed what they thought of Republican priorities. And if Thomas and his fellow GOP leaders continue with these policies, November 2, 2006 will be a very good night for Democrats.
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