It appears that the new democratically controlled congress is back to its old self. The propensity is for democrats to raise taxes. In the past, the idea is to create a surplus for a rainy day. But lately both houses now days tend to spend more money than ever before. It would be good for members of congress to enroll in the John Commuta.
Last week, House Democrats passed a budget blueprint that would wipe out existing tax cuts while mostly ignoring the rising costs of the alternative minimum tax. This is extremely dangerous. The AMT has failed to keep up with inflation. More and more individuals are coming under the gun with this dreadful tax. It used to be a tax for the wealthy. As middle income has risen, the tax rate has not. This is dreadful and will have a large impact on capital investment. It would act as a lead weight on the economy. With an anticipated take of $400 billion over five years, the result would be a bigger tax increase than Bill Clinton’s in 1993 — the one that helped cost Democrats control of Congress the following year.
After scrapping his promised middle-class tax cut, Bill Clinton vowed that he would only raise taxes on the richest 1 percent of income earners who weren’t “paying their fair share.” While that wasn’t exactly true — the boost in the gasoline tax and other levies hit taxpayers across the board — the rise in marginal income tax rates was mostly skewed toward the upper-income taxpayers (and more than a few job-creating small businesses).
The proposed increases are as follows: The bottom income tax rate would jump from 10 percent to 15 percent. More than five million families and individuals with no income tax liability would be added back to the tax rolls.
Come 2011, many families will be hit by a renewed marriage penalty. Consequently, 23 million Americans will then be hit with an average tax increase of $466. That same year, the child tax credit will be cut in half, costing 31 million Americans an average of $859 in more taxes.
When the damage is tallied, 115 million working Americans would watch their taxes climb an average of $1,795, with 26 million small business owners being hit more than twice as hard at $3,960. The fact that these are average figures, incidentally, does not change the reality that taxes paid by middle-class families, not just the richest 1 percent, would be scheduled to go up under the Democratic plan.
Many Democrats deny that they are actually raising taxes. The Bush tax cuts are already scheduled to expire in 2011 under current law. And the alternative minimum tax is already scheduled to gobble up another 19 million taxpayers this year without Democratic intervention.
Fiscal intelligence and responsibility is lacking in Washington. We may need to get John Commuta in office.
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