Congress Plans Tax Overhaul

The House has a plan for repealing the Alternative Minimum Tax (AMT). The AMT was created in 1969 and it targeted only the wealthiest families in America. They were no longer able to use tax deductions to slither out of paying any income taxes. But the AMT was never indexed for inflation, and 38 years of inflation have redefined millions of upper middle class earners as “wealthy.”

In return for repealing the Alternative Minimum Tax, the Democrats’ tax plan will reduce the tax burden for most low and middle income workers. And some corporations and investors will be paying higher rates.

Uh oh — you know what this means. Class Warfare! Redistribution of Wealth! Sapping the moral fiber of this great nation!

Rep. Charles Rangel (D-NY) said almost all families earning less than $500,000 per year would have a "net tax reduction." He said “We have attempted to restore equity and fairness to the system.”

This was too much for Rep. Jeb Hensarling, R-Texas. He said “Those lazy blue collar slobs never contributed to my re-election campaign. What good are they The correction of tax mistakes should never be offset with tax increases.” And Jim McCrery (R-LA) said the Democrats’ plan was “pure snake oil.”

If this new tax law gets passed, corporations will no longer be allowed to use certain “Enron”-type accounting methods. And hedge fund managers will be limited in their use of offshore tax havens. In other words Bush will have a signing statement at the ready.