October 5, 2007 - By True Patriot and Congressman
Ron
Paul
Representative Charles Rangel’s recently announced plan
to address the impending Alternative Minimum Tax’s application
to middle-class Americans demonstrates limited economic understanding.
The Alternative Minimum Tax (AMT) began in the late 1960's
because 155 wealthy taxpayers had become savvy enough with
loopholes that they managed to avoid income taxes altogether.
Very few Americans avoided taxes completely this way, nonetheless,
policy was enacted that now threatens 25 million Americans.
Rangel's plan boasts loudly about repealing the AMT, but under
the Democrats’ pay-as-you-go rules, actual tax cuts are
not allowed. Congress must replace any tax revenue reduction
with an increase somewhere else, and of course, there are no
rules preventing tax hikes. Thus, a new 4% surtax on incomes
over $150,000 for singles and $200,000 for couples is proposed
to "pay for" the estimated lost revenue. This simultaneously
raises $36 billion MORE than simply leaving the AMT alone,
and creates a huge new marriage penalty tax. It won't be long
before $150,000 is an average income, and middle class taxpayers
will again face the situation we see coming today from inflation
and the AMT. Overall, the Rangel tax plan is estimated to increase
taxes by $3.5 trillion over the next 10 years.
With the leadership in Congress calling for this massive tax
hike, spending levels promising to absorb all that and then
some (thanks to our ambitiously misguided foreign policy),
as well as the Federal Reserve's again cheapening the dollar,
American taxpayers are wondering where their purchasing power
went. We are working harder than ever before, as our standard
of living falls.
The founding fathers never saw taxation as a method to direct
social behavior or enforce equality. Equality to them was equality
under the law, not equality of outcome, or income. It was not
the founding fathers' job to manage the economy, or make American
businesses competitive. That was up to the free market and
American businesses. The founders sought to provide only protection
of property and civil liberties such that job creation could
happen naturally and peacefully in a stable, prosperous environment.
They never sought to take from the rich to give to the poor,
or rob Peter to pay Paul. But today, the top 5% of earners
in this country pay over half of all income taxes collected,
but only bring in a third of the income. One third of Americans
pay nothing or receive subsidies from government.
Tax policy should not be based on the premise that government
owns you and allows you to keep some arbitrary amount of your
labor. Thus, the AMT should be repealed. The estate tax should
be repealed. Capital gains taxes should be repealed. The income
tax should be repealed. We don’t need to overhaul or
adjust tax policy, we need to scrap the whole thing and start
over.
But this message is not getting through to the leadership
of Congress. Congress has ensnared itself in rules so that
the only changes in tax policy allowed are increases, while
the administration is obsessed with spending, especially spending
us into oblivion by spreading this dead-end war when we should
be coming home.
If Washington can only do wrong, then let’s hope for
gridlock, until a more sensible Congress is in office. Sometimes
a do-nothing Congress is a lot better than the alternative.
Read more Articles by Ron Paul at http://www.house.gov/paul/legis.shtml
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