Wednesday, December 14, 2005

Strategery of the Frist: The Case of the AMT

by Tom Bozzo

The Majority Leader discovers a tax cut he can't commit to cat-herding through the Senate:
New York Times: Cut In Minimum Tax Not Likely: Senator Bill Frist, the majority leader, said Tuesday that Congress was not likely to act this year to shield millions of middle- and upper-income taxpayers from a larger income tax bite as lawmakers moved into the final days of the session with many major issues hanging in the balance.

In laying out what he hoped to accomplish before adjourning for the year, Mr. Frist, Republican of Tennessee, said that "in all likelihood" the Senate would not try to reach agreement with the House on competing $30 billion plans to reduce the impact of the alternative minimum tax. The tax, originally created to prevent the rich from escaping tax liability, is expected to reach another 15 million Americans next year because of inflation.
In some ways, this could be worse:
Mr. Frist's position means it is likely that Congress will also delay until 2006 a larger debate over nearly $100 million [sic; billion is meant] in tax breaks that Republicans say are essential to economic growth. But the House and Senate have taken different approaches on tax relief, with the House extending lower tax rates on investments while the Senate balked because of opposition from Democrats and Republican moderates.
The rest of the Republican tax package is pretty much an unmitigated atrocity, particularly when paired with the otherwise symbolic spending cuts directed at such groups as the sick, the hungry, and college students, as my good friend Drek recently observed. AMT incidence, at least, is predominantly upper-middle-class instead of upper-class. Politically, the extension is a no-brainer: While the tax bills won't appear until spring '07, segments of the working well-to-do are swing consitutencies and balking on relief cedes tax-cutting ground to Democrats like Chuck Schumer, who managed a pretty good sound bite:
"This should have been our No. 1 tax priority and instead, because of right-wing ideological objectives, the middle and upper class will suffer and only the very, very wealthy will benefit."
My #1 tax priority would be raising the money the government needs fairly and efficiently, but hey.
I won't mind paying AMT (assuming it hits me this year) if they also don't go ahead and extend those Cap Gains/Div cuts (which saves us on taxes, though not so much as the AMT costs) this year.

Frist is demonstrating why he should never have been made Senate Majority Leader. That the Ancestral Party did so is off-putting; they always used to prefer competence.
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