The budget constraint

A new tax favor for the relatively wealthy is now in the stimulus package:

In place of those business credits, Democrats expect to include a
"patch" for the Alternative Minimum Tax, a provision meant to prevent
upper middle class wage earners from moving into a higher tax bracket.
The AMT was originally designed 40 years ago to assure that the
wealthiest Americans were not able to shelter their earnings from the
Internal Revenue Service.

Estimates peg the cost of this year's AMT fix at around $70 billion,
and congressional leaders and key members of the tax-writing Senate
Finance and House Ways and Means committees would prefer to deal with
it now rather than wait to make it part of an end-of-the-session crush,
as it has in recent years.  Rep. Charles Rangel
(D-N.Y.), the Ways and Means chairman, said yesterday that plans were
"more than tentative" for including the AMT provision in the stimulus
package.

Furthermore, Congress is expanding SCHIP, but maybe it's not as progressive as it sounds:

If Democrats thought health care reform was going to happen this
year, said health policy consultant Robert Laszewski, they would have
leveraged the popular, bipartisan children's program to build support
for the much bigger universal coverage plan that will need every vote
they can find.

Quick passage of the children's health care bill reveals "a lack of
confidence" by Democratic leaders, Laszewski said. Asked what's going
to stop health care reform this year, he said, "$2 trillion of special
interests."

Comments

They pass an AMT patch every year and never pay for it, just like they won't pay for the stimulus. My guess is that they'll drop the AMT patch from the stimulus because it adds $70 billion to the bottom line.

The AMT is what you get when you let policy be driven by envy, with no room for coherence, fairness, or common sense.

My complaint, though, is the sneaking suspicion that this is an attempt to patch it for 2009, in which case they're already 2 weeks late; I know that, for 2007, they were 50 weeks late, though I missed what they did for 2008. Up until 1993, my recollection is that tax laws were passed before the activity on which tax was being assessed. Perhaps it would be incongruous to graft this basic element of the rule of law onto legislation so foreign to it.

Universal coverage means get in line and wait.

Streetwalker is undoubtedly right, however too idealistic. No matter what Congress passes, the wealthiest will always find a way to escape taxes, whereas the hard-working middle class will be ripped half-naked. Laws are invented and passed by the rich.

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