The GOP leadership and Pres. Bush have proven that Republican fiscal responsibility is a myth. The Senate had to pass a version of AMT relief that is not paid for because Bush threatened to veto and the GOP filibustered the “Pay-Go” version.
The AMT was passed in 1969 because 145 millionaires were paying no taxes because of deductions allowed. But since it was not indexed for inflation it kept biting lower and this year could hit incomes as low as $30,000-50,000. This one year fix will cost $70 billion in lost revenue.
Sen. Gregg (R, NH) argued these were “phantom funds” that didn’t need to be offset. However, those “phantom funds” are in Bush’s budget proposal. If the AMT is removed, there are only three choices – cut spending, borrow more, or shift the tax burden. The Democrats wanted to tax private equity fund executives (who made $45 billion in the last six years) and hedge fund managers to offset the AMT fix. Under current rules these highly-paid individuals only pay the 15% capital gains rate on their income instead of the 35% income tax rate.
Pres. Bush and the GOP are insisting on protecting them and instead forcing $70 billion to be added to the deficit for the middle class to pay for over generations (more borrowing from China). And what if the AMT is not “fixed?” Remember the “Bush tax cuts”? The non-partisan Tax Policy Center says the AMT will TAKE BACK 13% of those tax cuts for those incomes between $50,000 & 100,000. But those $1 million plus incomes will only lose 3% of their tax cuts.
For 12 years (1994-2006) the GOP Congress never passed all the appropriation bills before the fiscal year ended. For six years (2000-2006) the GOP Congress and Pres. Bush have never passed a balanced budget. And now Bush and the GOP minority are preventing the Democratic Congress from doing so.
GOP fiscal responsibility? Only if you define it as protecting the wealthy at the expense of the middle class.