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Democrats and taxes
October 29, 2007
Much as I agree with the FT’s editorial on Charles Rangel’s new tax bill, one point bears emphasising. If passed (which, as the leader pointed out, it won’t be) the bill would provide a permanent fix for the Alternative Minimum Tax and improve the efficiency of the corporate income tax by broadening its base and lowering its rate. Its distributional implications are modest and, as far as they go, desirable. Which is all well and good. As compared with other ways of fixing the AMT, notably patching it year by year, this is fine.
But remember that the tax cuts of 2001-06 are mostly due to expire by 2010. The Rangel bill, of course, does not forestall that event. As things stand, a significant tax increase is therefore in the pipeline, unless the next administration intervenes to modify the way tax rates reset (which it will). And that is not the end of the uncertainty, because the social-security tax is yet another candidate for an increase. (Barack Obama, for instance, has talked of raising or removing the income cap.)
In short, the Rangel bill does not show that Democrats plan no swingeing increases in income taxes after 2008. It shows only that they see an intelligent way to be rid of the AMT. The "mother of all tax reforms", as Mr Rangel called his bill, is not in any sense a comprehensive reform and leaves a lot of questions unanswered.
In the USA the partners and executives of Hedge-Funds pay a tax of 15-16% , while most taxpayers and Corporations in the USA pay 30 to 35 %, and considering that in many cases the main stockholders in Defense and Homeland Security Government contracts are Hedge-Funds and alike,with huge profits due to “no-bid” contracts ( no competition) , this is considered by most people in the USA as unjust, unfair and highly un-constitutional, so, consequently, the Congress will not act, as Mayority leader Senator Reid said last week, and the biggest profiteers in the war will be able to keep their huge war profits in Tax Exempt or low-tax paradises in the Caribbean and elsewhere, a wonderful formula for the few and well connected.
logically, this huge windfall is the motor for more war and insurgency,because let’s face, we are human, and Hedge-Funds too, so as long as war profits and no-bid contracts get rewarded, we will see more war,more violence and the need for more contracts,and as a realistic Lobby said in DC: invest in bullets,painkillers and bodybags, now that this Administration is pushing towards military action in Iran, the potential for profits are unlimited…
Posted by: blogger | October 31st, 2007 at 4:43 pm | Report this comment