Now that the Democrats control the House, Charlie Rangel will be in charge of writing tax legislation. (That’s a sentence I’d hoped never to have to write!) As you’ve likely heard, he and other Democrats are talking about giving tax relief to millions of upper-income taxpayers by “fixing” the alternative minimum tax. There is a certain irony in this, perhaps, but I don’t suppose many people still harbor illusions about who the Democrats’ real constituencies are. It’s been commonly remarked in the press, as in the Boston Globe article linked above, that:
The focus on the tax is hardly surprising, given that victims of the tax have been concentrated in high-cost urban areas such as Washington, New York, and San Francisco — places that tend to vote Democratic.
Over at the Power Line Forum, however, Notorious B.O.B. argues that the truth is worse than is being reported: if the AMT “fix” is to be revenue neutral, as the Democrats insist, the effect can only be an increase in Red State taxes to finance tax cuts that are predominantly in the Blue States:
Assume the $250K