Posted on 12/20/2007 12:23:55 AM PST by bruinbirdman
Congress votes 20 million taxpayers a break. So why are Nancy Pelosi and the Democrats so bummed?
It's going to be a blue Christmas for Democrats in Congress--but not for some 20 million taxpayers who narrowly escaped being ensnared by the alternative minimum tax (AMT) this year.
Before closing up shop for 2007, the House of Representatives Wednesday abandoned its strict budgetary rules, voting 352-64 to keep the AMT from rippling across America's upper-middle class. But this AMT "patch" adds more than $50 billion to the federal deficit, the latest in a string of legislative defeats for Democrats, who rode into town last January determined to make big changes in Congress--and have little to show for their efforts a year later.
"This is not the version of the AMT relief bill that the "new direction" Congress wanted to pass," said House Speaker Nancy Pelosi, D-Calif.
The Democrats really had no choice. The Senate--which is not bound by the House's spending restrictions--earlier this month approved an AMT patch that adds to the federal deficit. Then, after wrapping up major legislative business (mainly the 2008 budget) Tuesday night, many senators headed home for the holidays. That meant the House had to pass the Senate version of the bill if lawmakers wanted to shield taxpayers from the AMT.
The bill now heads to President Bush's desk for his signature. He has indicated that he will sign it into law.
For months, Democrats and Republicans have been playing a game of chicken over AMT relief. Democrats, especially the fiscally conservative "blue dog" coalition in the House, demanded the relief adhere to the House's "pay-go" rules, which require spending increases to be offset without adding to the deficit. A plan proposed by Ways and Means Committee Chairman Charles Rangel, D-N.Y., would have raised taxes on private equity partners and hedge fund managers to help pay for the $50 billion relief.
But Republicans said they wouldn't raise taxes to stop a tax increase that never should have happened in the first place. The AMT was adopted in 1969 to ensure wealthy Americans with tax shelters don't shirk their tax burden altogether.
The AMT is not indexed for inflation, and it doesn't allow some mundane exemptions, meaning that it threatens to affect a growing number of taxpayers every year--unless Congress patches it, as lawmakers have routinely done.
When the vote came down to the wire, the blue dogs weren't able to muster the opposition they had promised.
Democrats are in the process of figuring out a way to eliminate the AMT altogether, but that day could be a long way off. Last year, 3.5 million people paid the AMT. If Congress hadn't acted, it would have affected 23.4 million Americans, according to the Tax Policy Center. On average, each affected return would have been hit with about $2,000 in alternative minimum tax.
The IRS has said Congress' delay in passing AMT relief could delay refunds by up to seven weeks. But there's a good chance it won't take that long: Last year, the president signed tax changes into law Dec. 20, and the refund delay was only about three weeks. The IRS says revised copies of the tax forms affected by AMT legislation will be posted online at IRS.gov within 72 hours after Bush signs the bill into law.
The battle over the AMT, which had been going on for months, was just half of a one-two punch Republicans delivered in Congress this week. Late Tuesday, the Senate passed a $555 billion "omnibus" budget for fiscal year 2008, essentially capitulating to President Bush's demand that Congress not spend beyond what the White House proposed last February. It also adds $70 billion to fund the wars in Iraq and Afghanistan. The House reluctantly passed the budget bill late Wednesday, sending it to the president's desk for signature.
Things could have been worse: President Bush earlier this year called for a 50% reduction in earmarks, using the 13,492 earmarks in the FY2005 budget as a benchmark. According to Taxpayers for Common Sense, a watchdog group, there are now 11,144 earmarks in the 2008 budget--not much progress. The president could have vetoed the bill on those grounds alone.
Things could have been worse: President Bush earlier this year called for a 50% reduction in earmarks, using the 13,492 earmarks in the FY2005 budget as a benchmark. According to Taxpayers for Common Sense, a watchdog group, there are now 11,144 earmarks in the 2008 budget--not much progress. The president could have vetoed the bill on those grounds alone. Even in victory, Democrats have found defeat. On Wednesday, President Bush signed an energy bill that raises vehicle fuel economy standards by 40% and boosts biofuel production. Pelosi has said the bill "will set America on a path to save more than 4 million barrels of oil per day by 2030." What she didn't say was that Democrats had to drop nearly all incentives for renewable energy and agree not to raise taxes on oil companies like BP (nyse: BP - news - people ), Exxon Mobil (nyse: XOM - news - people ) and ConocoPhillips (nyse: COP - news - people ) in order to get it passed.
These stumbles come on the heels of other failed Democratic efforts, including reform of the nation's immigration policies and a plan to expand the State Children's Health Insurance Program. To be sure, it's not for lack of trying; their efforts have routinely been blocked by Republicans in the Senate, where it takes 60 votes to overcome a filibuster.
But the wound that stings most for House Democrats might very well be their forced abandonment of their "pay-go" rules, which they had generally adhered to all year. Heading home for vacation, their biggest challenge will be crafting resolutions for 2008 that will keep them in power in 2009.
These aren’t “lost funds”, they’re funds that never should have been collected in the first place.
Hope the author doesn't get in trouble for using hate speech like that. It probably should have referred to a "teal holiday season..."
Instead of just repealing the AMT, they leave it on the books so they can argue about it again. What a bunch of jerks.
BUT, at least this over so TurboTax can complete and release the 2007 version. I was getting worried that I would have to spend hours at the kitchen table (instead of multiple 60-minute periods at a computer) completing my taxes and complying with the required disclosure of my life's details.
The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases.
A. A billion seconds ago it was 1959.
B. A billion minutes ago Jesus was alive.
C. A billion hours ago our ancestors were living in the Stone Age.
D. A billion days ago no-one walked on the earth on two feet.
E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.
While this thought is still fresh in our brain, let's take a look at New Orleans It's amazing what you can learn with some simple division
Louisiana Senator, Mary Landrieu (D), is presently asking the Congress for $250 BILLION to rebuild New Orleans . Interesting number, what does it mean?
A. Well, if you are one of 484,674 residents of New Orleans (every man, woman, child), you each get $516,528.
B. Or, if you have one of the 188,251 homes in New Orleans , your home gets $1,329,787.
C. Or, if you are a family of four, your family gets $2,066,012.
Washington, D.C .. HELLO!!! ... Are all your calculators broken??
This little reminder goes on to say Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world.
So, the nude erection congress can’t take inflation into account? Hm.
I don’t make enough money for the AMT to apply, but give it some time - is paying this discretionary? Somebody affected
needs to make a court case out of this. This is why objective standards exist - to make meaningful comparisons over time - a 1969 dollar isn’t the same thing - though we are taxed as if nominal numbers mean something.
1974 was a billion seconds ago, and a billion minutes takes you to the year 106.
Not only should they never have been collected in the first place, for 20 million taxpayers they never were collected period.
There is no “$50 billion loss” in tax revenue over the year before. So the “loss” of something that never was in the first place is way over the top. Yet the media never calls them on it.
The Dems know—though they deny it—that any tax increase will hurt the economy.
Bad economy = Dem president in 2009.
Basic liberal politics,typical contempt for America’s interests,usual mendacity.
Agreed, got another redefining point to make,
the fiscally conservative “blue dog” coalition in the House, demanded the relief adhere to the House’s “pay-go” rules, which require spending increases to be offset without adding to the deficit.
.
Fiscally conservative should be letting everyone keep most of what they earn, of course Democrats want it to mean, ‘keep tax rates high to continue financing Democrat Socialist form of Government’.
piglosi reid and the lib/dems lose again!!!
in this year of draining the swamp, etc...what have these a-holes actually accomplished to help the American People???
Another loss for Queen Nancy, The Unready and Hapless Harry Reid that we won’t be hearing or reading about today. The msm is studiously averting their eyes from the 2007 train wreck that was the Dem leadership in the House and Senate this year, hoping no one will notice.
Their cure for this debacle is to elect a veto-proof Senate, so conservatives must go vote to keep that from happening. Write in whomever you want for President, if the nominees don’t suit you, but we must make every effort to prevent the Socialists winning the presidency and large majorities in the Senate and House, but particularly the Senate, next year. It’s crucial to preserve what is left of our freedom.
The New Direction Congress continues it’s downward trajectory...
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