Democrat, Republican, Whatever
Everyone knows that Democrats are against tax cuts and Republicans are for tax cuts, right? Well, think again.
One of the more amusing (if your cynical) aspects of tax policy during the last couple of years has been the squirming of New York Democrats over the alternative minimum tax, the dreaded AMT. There’s been all sorts of congressional horse trading over this tax, but I think we’re finally about to reach the pinnacle of absurdity.
For more than one year, insiders have known that Republicans might try to renew the 2003 tax cuts (JGTRRA) by linking their extension to (another) one-year fix for the AMT. Why? Because the AMT hits individuals in high-tax states particularly hard…..states such as New York….with two Democratic U.S. Senators.
Normally, Democrats loathe any sort of tax cut, but when a particularly egregious tax is aimed directly at their constituents, well, that’s another story. Which brings us to the funny/sick part of the story.
New York Senator Charles Schumer and Maine’s Republican Senator Olympia Snowe want to institute a windfall profits tax on major oil companies. The tax would only last one year. Right. (We’ll be posting more on this “tax†in the coming weeks.)
I don’t suppose Schumer’s aggressive stance could have anything to do with wanting to offset the “cost†of extending AMT relief one more year? And, I guess it could just be a coincidence that the new profits tax is supposed to raise around $4 billion and the AMT relief for one year would “cost†about $6 billion? Feel free to make up your own mind.
(For Wall Street Journal subscribers, see “The Max Baucus Speed Bump,†February 9, 2006, and also see Chuck Schumer’s letter to the Journal, “Big Oil’s Reported Profits Are Kept Artificially Low,†December 7, 2005.)
-NM (I’m just following Chad’s lead.)
March 4th, 2006 at 9:47 pm
In my opinion this article is a perfect example of how the government uses their power to pass new taxes to raise the money to pay for other services needed in the united states. It didn’t surprise me that the government would try to pass a tax to pay for AMT funds because now a days the government makes us as the people of the United States to pay for any major service needed. I don’t honestly like the idea of starting a profit tax on oil because gas prices are already high. The government officials abuse their powers when it comes to starting new taxes. I don’t understand why the government just can’t print the money to pay for the AMT relief. I just don’t understand why some of the billionaires we have in the United States to pay for the relief.
March 5th, 2006 at 1:10 pm
I get tired of listening the the democrates and the republican bickering with each other and a lot of times defeating their own purpose. Lately, I have been thinking that if we had another strong party that would be equal to these (of course, other than Independent) that the third party would possibly help to balance these arguements. As said before, competition is always good for the consumer!
March 7th, 2006 at 10:08 pm
Everett,
We aren’t getting to this in 211, but in 212 you will see that printing money to pay for government services (or government frivolity) is very inflationary, and soon becomes a tax on bank accounts, as the value of people’s money in the bank and in their wallets and mattresses declines in buying power. Also, you would probably be surprised at how much of the federal tax collections comes from the rich and the very rich. It is myth that the rich don’t pay much in taxes. There is a general belief that the rich get away without paying taxes but it is a very rare thing.
Morris Coats