The wildfires in Southern California should have taught us two major lessons: State and local governments need to be better prepared for predictable disasters and, when it comes to emergency services, you get what you pay for.   more »

House Republican Study Committee Chairman Jeb Hensarling (R-Tex.) has an extraordinary idea: "The correction of tax mistakes should never be offset with tax increases." Hensarling's Law, which might also be called the Mulligan Act of 2007, came in response to a huge tax restructuring proposed on Oct. 25 by House Ways & Means Committee Chairman Charlie Rangel (D-N.Y.). The core of that plan would repeal the Alternative Minimum Tax and make up nearly $1 trillion in lost revenue over 10 years with an income tax surcharge and other tax hikes.    more »

Here are two related items by TPC researchers.  Jason Furman has an op ed in the Think Tank section of WashingtonPost.com on the need for corporate tax reform and Mr. Rangel's new proposal.  I have an article on the AMT and options for dealing with it in the current issue of the Milken Institute Review.  I don't specifically mention the Rangel proposal because I wrote the article back in the summer (and my crystal ball was out of service), but I do talk about the surtax as a replacement among other options.

One of the main charges against the Rangel tax plan is that it would increase taxes by $1 trillion. Which is a bit odd because the President's budget proposed the exact same revenue increase, although in his case it is collected through the Alternative Minimum Tax (AMT) instead of a rate surcharge on high income families.    more »

My colleagues and I had some heartburn when various news outlets referred to a surtax proposal made by Greg Leiserson and me as "the Tax Policy Center plan" to fix the AMT. The TPC has no tax plan or institutional positions of any kind. Highlighting that point, TPC's chief blogger, Howard Gleckman, showed that we don't speak with one voice when he complained that "I don't like ... the way AMT relief [in Chairman Rangel's tax reform plan] is funded" in his most recent post. That is, Howard's not keen on Greg's and my modest proposal, which Mr. Rangel adopted with small modifications.   more »

Let’s start with the obvious: The tax plan rolled out today by House Ways & Means Committee Chairman Charlie Rangel (D-N.Y.) is not the “mother of all tax reforms,” the congressman’s claim notwithstanding.    more »

Treasury Secretary Hank Paulson said in a letter to congressional Republicans yesterday that Congress needs to act immediately to enact an Alternative Minimum Tax fix. One reason: It will take 12-13 weeks for the agency to reprogram its computers to account for the change. Huh?    more »

President Bush and the Congress are going to spend much of the next three months in an ugly cage match over $21 billion in spending. While $21 billion is real money by anyone's definition, the energy they will expend on this largely symbolic fight could be put to much better use. They could, for instance, use the time to look seriously at where the real money is—entitlements and an increasingly out-of-whack tax code.    more »

In Saturday’s Washington Post, Michael Kinsley argued that the U.S. should dump the regular income tax and replace it with the simpler and fairer alternative minimum tax. On their face, his arguments are appealing: The AMT has a broader base than the regular income tax. It has only two rates—26 percent and 28 percent. And it is simpler, dispensing with a raft of deductions, including those for state and local taxes, personal exemptions, and the standard deduction. So why did I flash back to the old 1970s comedy Laugh-In, when Arte Johnson, replete with Wehrmacht battle helmet and a bad German accent, would pipe up, "Very interesting … but stupid"?    more »

Yesterday was a rough day for those few hearty souls who think Washington is going to do much about fixing our health care system any time soon. Congress failed to override President Bush’s veto of legislation to expand the State Children’s Health Insurance Program (SCHIP). At almost the same time, the House Budget Committee held a hearing on whether tax incentives are the best tool to increase private insurance coverage.    more »

Welcome to TaxVox, the Tax Policy Center’s new tax and budget policy blog. We started TaxVox to communicate directly and quickly with an online community interested in fiscal policy issues. We’ll be commenting on federal, state, and local legislation; tax administration; and new research on individual and business taxation. We’ll also have lots to say about the Presidential candidates’ tax agendas.    more »

There has been talk in recent days that the congressional effort to raise taxes on the earnings of private equity managers has been killed. Don’t believe it.    more »

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