Mother’s Tax Day

Welcome, a tad belatedly (hey! I’ve been busy; and did I mention that vacation I just took?), to TaxVox.

The new tax and budget policy blog is from the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.

Those TPC folks have good timing, getting into the blogging act right before Ways and Means Chairman Charles Rangel stirs the roiling tax reform pot.

And thanks to Rangel, it looks like every day, at least for a while, is going to be devoted to his Mother of Tax Reforms. (Yeah, I’m tired of that phrase, too, but please indulge me one more time, for my headline’s sake, at least!)

Howard Gleckman, TPC Senior Research Associate, takes a look at Mother’s pros and cons.

A couple of things that Gleckman likes: The proposal puts tax reform back on the table and it gets rid of the AMT in a more or less fair way.

A couple of his dislikes:  The funding mechanism for AMT relief and that the plan is "too timid."

Read Gleckman’s complete blog item here.

Jason Furman looks at one of the big arguments against Rangel’s plan: It would increase taxes by $1 trillion. That criticism, says Furman, "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."

And about that surcharge. For single and head-of-household taxpayers, it would be 4 percent of modified adjusted gross income (MAGI) between $150,000 and $250,000; it would go to 4.6 percent for earnings over $250,000. For married filers, the 4 percent surtax would apply to MAGI between $200,000 and $500,000; 4.6 percent over $500,000.

TPC director Len Burman makes A Reluctant Defense of the Surtax, which he says "would be a huge improvement over the AMT." The surtax, notes Burman, also is consistent with the reason for the AMT — to ensure that high-income people paid at least some tax.

Enjoy the TPC analyses and again, welcome, TaxVox bloggers!