The Tax Bill to End All Tax Bills
It seems like families are feeling the financial pinch more than ever these days. With the costs at the gas-pump climbing, college tuition rates getting higher and the price of consumer goods rising, the last thing Americans need is to see more of their paycheck taken by the government. Unfortunately, last week the Ways and Means Committee chairman brought a massive tax proposal to the house floor. If that legislation were to ever become law, it would be the single largest tax increase in U.S. history.
The bill calls for a number of changes that will affect every single American taxpayer if it becomes law. First, it would eliminate the sweeping tax cuts enacted by Congress and the President in 2001. Those cuts let each American who pays taxes keep a little bit more of their hard earned income. In addition, this flawed tax increase legislation would also reinstate the marriage penalty, which would mean that couples who are married will have to pay higher taxes simply for being married. The tax increase proposal would also reinvigorate the Death Tax, a tax that was supposed to be phased out and eliminated by 2010. The Death Tax is a crippling tax for farmers, small business owners and anyone else who has worked hard and saved money to leave the next generation a little better off.
The bill also attempts, but fails, to provide a true fix to the alternative minimum tax. The alternative minimum tax (AMT) is a misnomer. There is nothing minimal about a tax that has not been adjusted for inflation in nearly 40 years. It was a measure originally intended to make sure that wealthy taxpayers paid their fair share, but since it has not been updated since that time, it has turned into a massive tax increase on middle class Americans. In 1970, the average household income was just a little more than $8,000 per year, but today it is nearly $28,000 per year. Obviously the definition of a wealthy taxpayer is considerably different in 2007 than it was in 1970. And, although the AMT desperately needs to be adjusted or eliminated altogether, a bill that increases taxes for every single American to the combined tune of 3.5 trillion dollars is not the solution.
Frankly, we do not need tax hikes to solve any of our fiscal problems. I believe the federal government is too big and spends too much money already and that we should instead look for ways to eliminate waste, fraud and abuse within the federal government. The money that is used should be spent wisely and in a manner that boosts our economy and creates opportunities for American workers. Rather than attempting to impose the largest tax increase in history, Congress should look for ways to spend less and spend wiser, which, in my opinion, is often the same thing.