The Tax Policy Center Newsletter
December 10, 2007
Republican Presidential Candidate Fred Thompson has announced a tax plan that combines tax cut extensions, additional tax cuts, and an option to pay tax under a new alternative tax system that would eliminate all current deductions and credits, increase the standard deduction and apply two rates of 10 and 25 percent. Thompson's plan would reduce federal revenues by $5-7 trillion over ten years. The plan would be highly regressive, providing a tax cut of 0.7 percent of income for those in the lowest quintile in 2011, 4.6 percent of income in the middle quintile, and 9.5 percent of income in the top quintile. This article describes the proposed changes in the individual income and estate tax and examines their implications for revenue and the distribution of tax burdens.
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To the surprise of no-one, the Senate has blinked in the stand-off over whether Congress will pay for the cost of patching the Alternative Minimum Tax for another year. The question now: Will House Democrats stand firm, or will they too cave in to the big-bucks lobbying campaign of the hedge fund and private equity industry? Chief TaxVox blogger, Howard Gleckman considers the politics of the AMT patch in his latest entry.
Continue reading at TaxVox
Late Thursday night, the Senate passed, by a vote of 88–5, a one-year increase in the AMT exemption without the offsetting tax increases in the version that passed the House--a $50 billion tax cut. More than 85 percent of the benefits would go to households earning $100,000 or more.
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