Bloomberg has a summary of Ways & Means Chairman Rangel’s proposals. His one-year “fix” of the AMT increases includes $48 billion tax increase on executives of hedge funds and private-equity firms. As for his major rewrite proposal:
Rangel said the broader measure, which he has called the “mother of all reforms,” would contain a 4 percent tax-rate surcharge on adjusted gross income over $200,000 for married couples. The surcharge would rise to 4.6 percent for those with income of more than $500,000. In addition, households with income of more than $200,000 would have to pay rates as high as 19.6 percent on capital gains and dividends, instead of the current rate of 15 percent.
That provision alone would raise $831.7 billion, more than enough to cover the cost of eliminating the minimum tax, Rangel said.
The overhaul, which he said wouldn’t be voted on this year, also lowers the corporate tax rate to 30.5 percent from 35 percent. To pay for that $363.8 billion tax cut, the proposal would repeal a special 32 percent tax rate for manufacturers and disallow the “last-in, first-out” accounting method that reduces taxes for businesses such as oil companies, wholesalers and automakers that hold inventory.
The proposal also imposes $9.4 billion in Social Security and Medicare taxes on lawyers, accountants and others who currently avoid them by organizing as a partnership. It would also raise $4.3 billion in taxes from investors by requiring stock purchase prices to be reported to the Internal Revenue Service beginning in 2009 and all other types of securities beginning in 2011.
The National Review has a copy of Rangel’s original document available for download, here.
CQ has a story on on the policy and politicalaspects of the debate.
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