ABC News’ Jake Tapper Reports: Rep. Charlie Rangel, D-NY, chairman of the House Ways and Means Committee, has introduced what he once called "the Mother of all Tax Bills" — legislation to overhaul the tax system, and most specifically to repeal the Alternative Minimum Tax or AMT.
The AMT was originally set up to make sure wealthy Americans paid a minimum amount of taxes but since it hasn’t been really adjusted for inflation the AMT has more and more hit middle class taxpayers.
Also under Rangel’s plan:
The top corporate marginal tax rate would be cut from 35 percent to 30.5 percent;
private equity firm managers who currently pay the 15% capital gains tax rate would pay an income tax rate of up to 35 percent on income earned from carried interest.
Republicans do not like this bill, not surprisingly.
"The Mother of All Tax Bills has turned out to be the Mother of All Tax Hikes," said House Minority Leader John Boehner, R-Ohio, Thursday.
While the bill does not mention the Bush tax cuts, GOPers object because they allege that the proposal assumes the Bush tax cuts from 2001 and 2003 expire — which means a return to previous level of the marriage penalty, estate tax, and the capital gains tax.
Republicans also say that the AMT elimination comes with an increase on individual income taxes in the bill – a 4% surtax on Americans who earn more than $150,000 filed individually, or $200,000 filed jointly.
However, Democrats say that all told, most people who earned between $200,000 and $400,000 will ended up paying less in taxes because of the elimination of the AMT, even with the surtax. Over $400,000, you’re on your own, pal.