by Frank James
For all those who like to read about the minutiae of Washington policy proposals the way others like to read about Lindsay Lohan's latest doings, we offer the "paper" on the new tax proposal from House Ways and Means Chairman Charlie Rangel.
"Paper" is what we reporters call the handouts policymakers give out to help us understand the ins and outs of often complex proposals. You'll often hear reporters at Washington press conferences ask, "Got any paper?" the same question people asked at Grateful Dead concerts, but with a different meaning.
This copy actually contains the scribblings a real-live reporter who was obviously doing some quick calculations. Warning: you'll need a tax accountant to understand some of what is discussed here.
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Comments
Jim McCreery the GOP ranking member of House Ways and Means says it the mother of all tax hikes--$1.3 trillion dollar tax hike.
This is the largest individual income tax increase in history.
The bill will add a 4 percent surtax on the adjusted gross income of Americans earning more than $150,000($200,000) for couples.In otherwords,it comes off your grosss income not your taxable income.
That is on top of the scheduled expiration of the 2001 and 2003 tax cuts. So, under the Democrats plan over the next few years the individual income tax top rate will go up to 44 percent from 35 percent.The top tax rate for 29 other Organization for Economic Cooperation and Development Countries --basically other developed nations have an annual average marginal tax rate of 35.7 percent. In fact, only only five OECDC countries would have higher top marginal rates in 2011 if this Democrat bill passes.
This extremely high tax rate will affect some 10 million taxpayers directly including those who report business income like small business owners who hire workers and farmers.The damage will ripple through the economy because small businesses and farmers pay their taxes as individuals.It is bringinng back the marriage penalty in a big way.
This is a massive tax hike on the engine that drives most job growth in this country.
McCreery says Rangel claims to help 90 million Americans avoid the Alternative Minimum Tax. But, Rangel is selling pure snake oil since many of these taxpayers are getting an imaginary tax cut. Some of them are the 20 million Americans the Republicans shielded with AM Tax Patch.
Millions more are people who benefitted from the 2001 and 2003 tax cuts if you assume that 10 percent bracket will be eliminated along with the marriage penalty and the $1,000 child tax credit will expire.
We know the 90 million is pure hokum.
The Democrats paygo system is a fallacy. There is no need to pay for protecting taxpayers from a massive AMT Tax hike.
By arguing that preventing this tax increase requires us to raise taxes elsewhere, the Democrats are trying to lock Congress into a system where we are guaranteed to raise taxes by $3.5 trillion over 10 years.
This will hurt our nation's competitiveness and cost us American jobs
These Democrats have no shame--no shame at all for saying they are for the working man and his family. They are for bigger government and more dependence on government. And when you lose your job--they'll just blame the corporate and small business sector.
These people will do anything to hang on to power by fraudlently blaming tax cuts to benefit the wealthy. When 44 percent pay no taxes at all tax cuts across the board are the only fair way.
Instead of helping America be the best place on earth these America haters want to put us on the same plane as European socialists.
Since W's tax cuts Treasury is flush with more money than ever. It worked under John F Kennedy,Ronald Reagan and George W Bush.
Wakeup America throw these tax raisers out in 08. Go Republicans!
Posted by: Jerry White | October 27, 2007 11:42 AM
Well, I can see all you lefties managed to sit down and read the facts on something before commenting on this.
Jerry makes some very good points in his post above, but let me add a few more:
The elimination of LIFO (or as Mark Silva calls it "so-called accounting method known as LIFO for last in, first out.")inventory accounting method. Mr. Silva goes on to state that "this has enabled firms to pay less tax on inventories", which is true. What Mr. Silva does not state, probably because he does not understand, is why. LIFO will match the most current costs of inventory to the revenues derived from the sale of inventory. The matching principle is one of the bedrock principles of accounting. LIFO is one of the three most popular GAAP inventory accounting methods.
The elimination of "lower of cost or market" for inventory valuation in this tax bill once again violates another bnedrock of accounting - conservatism (not the political version). It states that assets, which inventory is one, should be valued at the lower of its cost or its current market value. This assists stockholders in knowing what the assets on theior corporations are worth. A current example is for home builders that are sitting on inventories of unsold homes that may need to write them down to their current market value. Once again, Rangel violates sound accounting prinicples.
In addition, most of you on the left bemoan "corporate welfare". Are the two accounting methods I describe above forms of "corporate welfare"?
How about the portion of the proposal that calls for "extension of railroad track maintenance credit". Is that coroporate welfare to companies like BNSF, Norfolk Southern, etc...?
Posted by: Terry | October 28, 2007 9:37 PM