Taxes and snake oil!
Republicans reacted predictably.
"This is the largest individual income tax increase in history," Rep. Jim McCrery of Louisiana, Rangel's low-key GOP counterpart on the committee, wrote fellow Republicans. Rangel, he said, "is selling pure snake oil."
Mmm, snake oil! I’ll take two!
-The plan phases out the Alternative Minimum Tax, which was originally designed to prevent wealthy people from taking too many tax breaks but was never indexed for inflation, by applying a replacement tax of 4 percent of married couple income above a certain level, not to be less than $200,000. The tax would be 4.6 percent on income in excess of $500,000, or $250,000 in the case of a single taxpayer. High-income individuals would see a limitation on itemized deductions and a phase-out of deductions for personal exemptions, raising $29 billion over 10 years.
-The plan reduces the top corporate marginal tax rate from 35 percent to 30.5 percent, at a cost of $364 billion over 10 years. This would be paid for in part through such measures as repealing the domestic production activities deduction and requiring that U.S. corporations that defer income through controlled foreign corporations also defer the deductions that are associated with this income. The last-in-first-out accounting method would also be eliminated, saving $106 billion over 10 years.
-Married couples filing jointly would be entitled to take an additional $850 as a standard deduction, at a cost of $48 billion.
-The number of lower-income taxpayers qualifying for earned income credit would grow, at a cost of $29 billion.
-The refundable child credit would be increased, at a cost of $9 billion.
-Investment fund managers would be prevented from paying taxes at capital gains rates, raising $26 billion.
-Hedge fund managers would be prevented from using offshore tax haven corporations to defer taxes on compensation received for providing investment services, raising $23 billion.
-There would be mandatory cost basis reporting by brokers for transactions involving publicly traded securities, raising $4 billion.