The Buffett Rule is Alternative Minimum Tax 2.0
I have been spouting this on my Twitter stream since at least yesterday, but forget "class warfare," forget "it's just political," forget the polls. The thing nobody is saying about the Buffett Rule is that is version two of the Alternative Minimum Tax.
When the AMT was originally passed, it was to deal with various deductions that meant certain rich people paid very little taxes. It was not inflation-indexed, so decades later, many middle-to-upper-middle class families pay it. People have been complaining about AMT for years. Everyone hates it.
Fast forward a few decades. Now we have the proposed Buffett Rule. Guess what? As with AMT, the Buffett Rule kick-ins are not inflation-indexed either! As with AMT, the Buffett Rule is meant to make sure rich people who have a bunch of deductions (or lower tax rates, because their type of income is taxed at a lower rate) pay a higher rate.
DOES THAT SOUND FAMILIAR? It should! Because it's the AMT all over again. And because it's not inflation-indexed, in thirty years we all will be paying it, as strange as that might seem to you now.
I'm not anti-tax. Personally, I'd like to see no new taxes until unemployment gets down below 7%, then I'd like to see the Bush Tax Cuts phased out over the course of a few years, the carried interest rate rule taken away, the Corporate tax reduced to world-standard levels (that should happen now), and at least one new bracket added above current brackets.
But the Buffett Rule is just stupid. It is staggering to me that it is not inflation-indexed, and that even as AMT hatred goes on unabated, nobody, and I mean nobody, seems able to put two-and-two together to get four, or to point out that this thing is basically nothin' more than the AMT all over again.
Seriously. Not even Fox, or the Republicans or those who have every incentive to put it together. It is boggling my mind ova heah.