Democrats Playing With Tax Fire newsvine furl google yahoo netscape

For a few years now, Congress has been holding the Alternative Minimum Tax at bay with one-year, stop-gap measures. Without some action by Congress, a whopping 23 million Americans will be subject to the tax.

The Alternative Minimum Tax which will target anyone with an income over $50,000, forces people to recalculate their income tax and pay the greater of their normal calculation or the aptly named Alternative Minimum. Democrats, at a cost of $1 trillion dollars over the next 10 years, are seeking to raise the $50,000 figure to $200,000 or even $250,000.

Sounds great, but under rules Democrats have imposed on themselves, any cut in taxes must be offset by either a cut in spending or another tax. This is where 'playing with fire' comes in to play. To erase a hidden tax that most people don't know about, Democrats will need to either dramatically cut spending or create a new and much more visible tax to replace it.

Specifics are still thin as to suggestions to offset the revenue loss. You can be sure that any alternative tax will have a hard time getting through the Senate where Republicans are sore about Democrats allowing Bush's Tax Cuts to lapse.

I expect that what will occur is that the Democrats will make a lot of noise about rolling back the tax, educating the populace about the impending doom, and then force the Republicans to block it -- creating another round of bad PR for the Republican conservatives into the 2008 election cycle.


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