Rep. Charles Rangel (D-NY) has unveiled what he calls “the mother of all tax bills.”

The result would be a sizable “re-shifting” of the current tax burden which has been heavily criticized even among the wealthy as “tilted to the rich.”

According to an analysis by the Tax Policy Center, the shift would mean that those making $500,000 or more would see an increase in their tax bills while those making less would see a reduction. The most significant reduction would affect families making between $10,000 and $20,000; those in the $100,000 to $200,000 range would also see relief, presumably because of changes to the Alternative Minimum Tax (AMT). Rangel has proposed repealing the AMT.

The Tax Policy Center estimates that 57% of tax filers (86 million households) would get a tax cut under Rangel’s bill in 2008, while 2.4% of filers (3.6 million households) would pay higher taxes.

The bill is not expected to pass (of course) but will serve as a platform for a debate on tax issues for 2008 and 2009.

Rangel has also offered a “patch” bill that would shield 21 million taxpayers from having to pay the AMT on their 2007 taxes. That bill passed the Ways and Means Committee but is expected to face stiff opposition from Republicans due to the offset measures to counter the $50 billion cost of the patch.

What do you think? Is a shift fair? Is Buffet right?

Print Friendly, PDF & Email
Author

Kelly Erb is a tax attorney, tax writer and podcaster.

Comments

  1. “The Tax Policy Center estimates that 57% of tax filers (86 million households) would get a tax cut under Rangel’s bill in 2008, while 2.4% of filers (3.6 million households) would pay higher taxes.”

    …And yet I’ve seen multiple people writing about it as the “mother of all tax hikes.” …Sigh…

  2. Even Rangel does not believe in his proposal as he proposed splitting out 2007 “extenders” and “1-year AMT patch” into separate proposals so they could get done. However, I am offended at Rangel attempt to phase-back in the marriage penalty.

    I would hope we could agree that the most significant threat to Americans (exclusive of terrorism and border concerns) is the unbridled credit spending, the proliferation of refinancing of real estate for consumer spending, and an incredible collapse of the concept of “SAVING” – we are impatient and too often feel “entitled” to instant gratification. The last thing we need is to send more to government ot “save” for us?!

    Remember, everyone has a different definaition of “Fair” based on their individual perspective and status (the rich are always those better off than me; “they” should be paying more – not me)!

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.