Wednesday, November 28, 2007

Massa Supports Rangel Tax Hike

Rottenchester links to Eric Massa's letter to the editor in response to Congressman Kuhl's recent editorial on Charlie Rangel's "Mother of All Tax Increases." Massa claims that "23 million American families will see their taxes cut" and that "[t]his is a bill that will provide over $50 billion in tax relief." To be sure, there are two sides to every story, and there are a few good elements in Rangel's bill, as Dr. JD Foster of the Heritage Foundation points out:

The Rangel bill is not all bad news. It also includes some excellent elements that ought not be lost in the avalanche of opposition. While the bill uses the confusion over the AMT patch and the revenue baseline as a screen for raising taxes, it also takes the excellent step of repealing the whole AMT system. This reform is long overdue. The AMT is today a tax policy without purpose, a complication without virtue. The problem with the Rangel bill is not the repeal of the AMT but the manner and extent to which the repeal is offset with other tax increases.

The Rangel bill also reduces the corporate income tax rate from the current 35 percent to 30.5 percent. The U.S. corporate tax rate hike is among the highest of the industrialized countries. It must come down significantly if American companies are to remain competitive at home or abroad. The only criticism of this portion of the bill is that the rate should come down further.

The Bad News: This bill, if enacted into law, will create a "surtax of up to 4.6% on Americans earning as little as $150,000 per year", "raise the top marginal tax rate to 47%", "raise the capital gains tax rate to 24.6%", and "cost Americans six million jobs".

Massa claims this bill is not a tax hike and that the only consequence (in his most populist rhetoric) will be that "some Wall Street multi-millionaires [will have] to pay more of their fair share," despite all of the evidence to the contrary. Several proposals have been introduced by Republicans to either patch the AMT or repeal it without raising taxes or costing American jobs. Yet Massa shamelessly continues to support a tax hike in the guise of a tax cut.

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