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Tax panel leans toward AMT repeal
MarketWatch ^ | 5/20/2005 | William L. Watts

Posted on 07/20/2005 12:51:23 PM PDT by Your Nightmare

Members of President Bush's advisory panel on tax reform largely agree that the individual alternative minimum tax, or AMT, should be fully repealed the committee's chairman said Wednesday.

"I think the obvious consensus was on the AMT on the individual side. We didn't end up with a consensus on the corporate side, even though I think it's fair to say that I think all panel members felt the corporate AMT was really not an effective way to tax," Chairman Connie Mack, a former Republican senator from Florida, told reporters after a public meeting of the committee.

The AMT is a parallel tax system created in 1969; it was enacted after it was revealed that a handful of extremely wealthy Americans paid no income tax. But thresholds for the AMT were never indexed for inflation. As a result, it has encompassed or threatened a growing number of middle-income taxpayers over the years. Lawmakers and administrations have responded by temporarily pushing up the threshold, but have yet to come up with a complete fix.

It's also become a substantial revenue source. Full repeal would reduce revenues by more than a trillion dollars over 10 years.

During the panel discussion, committee member Bill Frenzel said he agreed that it was time to "bite the bullet" and press for full repeal, but warned that doing so will put a "huge burden" on the panel to find a way to make up the lost revenues.

The panel's vice chairman, former Democratic Sen. John Breaux, said that while he's not a fan of the AMT, the panel must examine whether the full repeal of the system would allow some of the nation's highest earners to get away with paying no tax at all.

Mack replied that if that were the case, the committee would have to make adjustments in order to maintain roughly the same tax burden on the upper quintile of earners that is now in place.

The panel members agreed that changes to the corporate AMT would best be tackled as part of a broad corporate tax reform, Mack noted.

The committee, formally known as the President's Advisory Panel on Federal Tax Reform, must present the Treasury Department with a set of tax-reform proposals in September.

Bush has set a number of ground rules for the panel, however. The proposals must be revenue-neutral. Also, future tax measures can't touch the code's most sacred cows -- mortgage interest deduction and charitable giving.


TOPICS:
KEYWORDS: fairtax; taxes; taxreform
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To: Your Nightmare

It is only your opinion that it would be a disaster.


101 posted on 07/21/2005 12:58:25 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: rwrcpa1
I see you lost your ticks. Did you get dipped?
Nope, the alarm started ringing. The beginning of the end of the FairTax is here.
102 posted on 07/21/2005 12:59:06 PM PDT by Your Nightmare (The FairTax. The first tax plan with Fanboys.)
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To: rwrcpa1
It is only your opinion that it would be a disaster.
Yeah, what's your opinion (or do you consider them facts?).
103 posted on 07/21/2005 1:00:52 PM PDT by Your Nightmare (The FairTax. The first tax plan with Fanboys.)
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To: Your Nightmare

That's because a VAT is a sorry idea.


104 posted on 07/21/2005 1:01:56 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: Your Nightmare; Always Right
Hell, why not make it 1000% and quadruple the FCA? The government could make tons of revenue taxing itself and send us citizens huge "prebates."
According to one of their moron's examples (It must have been their AFT Scientologist director of research) at the end of the year, if you include the "prebate" you would actually have more spendable income than gross income...(the words "gross income" eludes them)...and they say it isn't a welfare check.

I've asked them several times. If the "prebate" to "untax" the poor is such a good idea why not increase the "prebate" (GAG!) to untax the middle class too?...or like you say, why stop there?

My other question about their (phoney) rebate to cover the tax on my "necessities" is: What are my necessities and what do they cost me?

105 posted on 07/21/2005 1:03:38 PM PDT by lewislynn ( Is calling for energy independence a "protectionist" act?)
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To: Your Nightmare
I was wondering the other day where the farttaxers have been. I downloaded several years ago a rather long study of the level of taxation required by way of a NRST with certain exclusions, needed to replace an eliminated income tax, and the number came in in the 30 odd percent range. If I can I will forward you the URL but I expect you to have it. I am thinking it was the Brookings Institute, they would have a definite slant on the outcome of tax reform but most of the time the studies they publish are at a minimum, accurate with respect to government generated economic data.
106 posted on 07/21/2005 1:04:31 PM PDT by Final Authority
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To: lewislynn

There are two parts to the payroll taxes. The employer contribution and the employee contribution. But you knew that. You just chose to ignore it.


107 posted on 07/21/2005 1:04:38 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: rwrcpa1
That's because a VAT is a sorry idea.
There are worse...
108 posted on 07/21/2005 1:07:14 PM PDT by Your Nightmare (The FairTax. The first tax plan with Fanboys.)
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To: Your Nightmare

I think calling them cult members hit a sore spot.


109 posted on 07/21/2005 1:08:39 PM PDT by Always Right
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To: rwrcpa1
The employer contribution and the employee contribution
They're both the employee's contribution. The employer contributes on the employee's behalf...if he didn't do that he could give the entire amount to the emoployee...everyone but you knows that.
110 posted on 07/21/2005 1:09:14 PM PDT by lewislynn ( Is calling for energy independence a "protectionist" act?)
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To: lewislynn
It'll collect it from fewer taxpayers on more items...that's what the fuss is about.

Sounds like a WONDERFUL idea! Is that what your beef with the Fair Tax is about?

111 posted on 07/21/2005 1:10:07 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: Your Nightmare
You've posted the 9/30 reco prediction previously?? Must have been really enlightening since it has slipped my mind. Perhaps you could post it again since I'm sure inquiring minds want to know.

What makes it so "obvious" to you that I'm "... not a rational person ..." - merely because I realize the FairTax obtains much more tax revenue from the underground economy than an income tax system??? Perhaps you could explain the "irrationality" of that.

Pointing out the obvious flaws and oversights in the Staff's "analysis" (which seems to have the force of law with you) is quite different than just disagreeing with them (which I also do) or merely calling them biased.

It is showing very clearly that they have not considered things that obviously have large economic effects and therefore skews their presentations (presumably accidentally) in a direction deleterious to the FairTax. And those are only things that are on the surface. Once more is known about their derivations it will, I'm sure, be quite apparent that they were off-base in a number of other areas also.

The reason you think I'm "biased" of course is that I disagree with you. In the case of the Panel Staff I don't just "declare" them biased, but show where their analysis if off base and inaccurate.
112 posted on 07/21/2005 1:10:13 PM PDT by pigdog
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To: lewislynn
It'll collect it from fewer taxpayers on more items...that's what the fuss is about.

Sounds like a WONDERFUL idea! Is that what your beef with the Fair Tax is about?

113 posted on 07/21/2005 1:10:23 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: Always Right

Sorry, but that theory you guys have about wages having to be reduced to make up for no withholding is just stupid.


114 posted on 07/21/2005 1:12:01 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: Always Right

And it is like AR, YN, and LL are IRS agents afraid they're going to lose their jobs.


115 posted on 07/21/2005 1:13:26 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: Always Right

Uh huh.


116 posted on 07/21/2005 1:15:05 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: rwrcpa1
Sorry, but that theory you guys have about wages having to be reduced to make up for no withholding is just stupid.

No it is not stupid, it is the bloody only possible way it could happen. If you do not extract all the income taxes out of the costs of the products and pass it on to the consumer, prices can not come down after you add a revenue neutral sales tax on. If workers pocket the taxes, prices go up....Q.E.D.

117 posted on 07/21/2005 1:16:19 PM PDT by Always Right
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To: pigdog
The reason you think I'm "biased" of course is that I disagree with you. In the case of the Panel Staff I don't just "declare" them biased, but show where their analysis if off base and inaccurate.
Based on what? They have posted but a thumbnail sketch of their methodology. So how were you able to show "where their analysis if off base and inaccurate."

The fact is you didn't and you can't. Your opinion of their analysis is prejudiced.
118 posted on 07/21/2005 1:18:29 PM PDT by Your Nightmare (The FairTax. The first tax plan with Fanboys.)
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To: Your Nightmare

Actually, I won't tell you the very descriptive term I have for you. Actually.


119 posted on 07/21/2005 1:18:57 PM PDT by rwrcpa1 (April 15. Let's make it just another day.)
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To: rwrcpa1
Sounds like a WONDERFUL idea!
Collecting the same amount of money from fewer taxpayers is a "wonderful idea"?

I guess it would be if you weren't one of the few.

120 posted on 07/21/2005 1:19:28 PM PDT by lewislynn ( Is calling for energy independence a "protectionist" act?)
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