We'll clean up our room... tomorrow
We've written before about how the clowns in the U.S. Congress (particularly the Senate) have left the tax system in a shambles. Now they're sending out letters to the IRS promising to get their act together and restore a little bit of order to the chaos before the end of the year. The pledge was made yesterday in connection with the alternative minimum tax, which Congress insists on jerking around with on an annual basis.
Heaven forbid they should just pass the legislation in a timely way. Now they send out letters telling you what they think they're going to pass. Great job, guys.
I'd hate to be the commissioner of internal revenue. Having to administer a system created by immature children is never any fun. Especially when the children never learn, but just get more and more unruly every year.
| Posted at 9:44 AM | Permalink |
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Comments (6)
I think it is even worse than Jack states.
The "fix" involved is with the Alternative Minimum Tax (AMT). The AMT was never indexed, and so unless it is modified it will include tens of thousands of tax payer who were never intended to be in AMT.
The Congress adjusts it every year to correct for this. The reason they will not do a permanent fix is that the reduced revenues will be used to compute future deficits, and by not making a permanent fix they make the deficits look smaller then they actually will be. In less polite circles this is called lying.
Another point. It was just released that the President's deficit reduction panel wants to reduce the top marginal tax rate to 23%, the top corporate rate to 26% and that this will substantially increase revenes and bring the budget in balance (except for interest) by 2015. Their apparent reasoning is that they will correct for the lower rates by eliinating tax preferences. Of course this will also cause the tax burdent to shift to middle income taxpayers, but hey,if you don't like it go start your own 501(c)(4) company and donate a couple of hundred million dollars to defeat it. Remember: no disclosure required.
Posted by Sid | November 10, 2010 11:42 AM
This is only the beginning of more fiscal irresponsibility. With Bernanke devaluing the dollar and pissing off the rest of the world we will pay dearly,literally, in many ways.
Posted by kimberly | November 10, 2010 12:02 PM
well, this is a little progress. But rather than the Federal Reserve print money in hyper quantities, it would behoove the country instead to just keep the Bush tax cuts in place so we aren't left continuing to guess how Congress might intervene regarding next year's income tax rates and estate tax rates.
Heck Congress is so dysfunctional it didn't even bother putting together a federal budget this year, which is the first time since 1973.
Posted by Bob Clark | November 10, 2010 12:50 PM
It's not "tens of thousands" affected by the AMT, it is "millions".
It's a back door income tax surprise for those making considerably less than $250K per year. You can be hit even if you make less than $100K per year.
As has been written elsewhere, the AMT was instituted to catch approx 100 high income citizens who were able to pay no income tax.
Quite a loophole that was plugged way back when!
Posted by Mike (one of the many) | November 10, 2010 6:14 PM
Re: "I'd hate to be the commissioner of internal revenue. Having to administer a system created by immature children is never any fun. Especially when the children never learn, but just get more and more unruly every year."
It's only public money, one function of which has become a funding mechanism for a degenerate form of publicly owned elections:
"Companies that received federal bailout money, including some that still owe money to the government, are giving to political candidates with vigor. Among companies with PACs, the 23 that received $1 billion or more in federal money through the Troubled Assets Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before."
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/24/AR2010102401561.html?sid=ST2010110907357
Posted by Gardiner Menefree | November 10, 2010 7:11 PM
Nothing happening here, folks, according to the combined House of Morgan & Rockefeller:
"J.P. Morgan Chase, which lobbies Washington more than any other bank, predicts that clashes between the House and Senate will lead to a 'gridlocked' Congress 'without any landmark legislation' enacted over the next two years, according to a confidential internal memorandum."
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/09/AR2010110906960.html?sid=ST2010110907357
"The memo predicts that lawmakers will extend the Bush-era tax cuts for at least a year...."
Regarding the Executive Branch:
"The memo contains sharp words for President Obama, saying he will be 'under pressure to reach beyond the Congress and appeal directly to the American people for support - something he has not done very successfully in the last two years.'
The bank's chief executive, Jamie Dimon, was a strong supporter of Obama's candidacy in 2008 but has since led the bank's shift toward the GOP. 'We were neither in love nor have we fallen out,' Dimon told Fortune magazine in September, referring to Obama. '. . . He may have close relations, but I am not one of them.'"
As to matters involving the judiciary, JPM does not venture a prediction regarding outcomes in several potentially expensive actions brought against it. In the vexing matter of the theft of WaMu, JPM is now feuding rather than colluding with the FDIC's Sheila Bair:
"Federal regulators and J.P. Morgan Chase - which together managed the collapse of Washington Mutual during the frenzied days of the financial crisis - are embroiled in a fight over who should cover billions of dollars from a legal mess that the failed Seattle thrift left behind."
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/10/AR2010111007309.html?sid=ST2010110907357
Posted by Gardiner Menefree | November 11, 2010 10:23 PM