Final compromise tax bill gives new tax breaks for the rich

[papau]

The House of Representatives and Senate have approved a final compromise version of the Tax Increase Prevention and Reconciliation Act (H.R. 4297), the tax reconciliation bill (passed the House on May 10 by a vote of 244-185 and passed the Senate by a vote of 54-44 on May 11).

The several items extending certain tax provisions that were dropped because of revenue limitations from the reconciliation bill such as the Saver's Credit – which was contained in the House and Senate bills – are expected to be included in a separate bill, most likely the pension reform legislation (the Saver's Credit is already contained in the House pension bill). Other tax provisions that might be added to the pension legislation include credits -- that have either already expired or will expire at the end of 2006 -- for research-and-development and education.

The bill makes the rich happy by extending the 15 percent top tax rate on capital gains and dividend income for an additional two years (through 2010) and fakes out the middle class by providing alternative minimum tax (AMT) relief for 2006 via a higher deduction before you hit the AMT.

BUT WE DO HAVE REVENUE RAISERS! - THE MASSIVE GIFT TO THE RICH OF MAKING ANY INVESTMENT A TAX FREE INVESTMENT VIA THE ELIMINATION OF THE MAX INCOME LIMIT FOR ROTH IRAS (METHOD IS TO INVEST IN NONDEDUCTIBLE IRA NOW WHICH HAS NO INCOME LIMIT AND THEN CONVERT TO ROTH IN 2010) IS DECLARED AN INCOME RAISER BECAUSE WHEN EFFECTIVE IN 2010 THE RICH MIGHT TAKE THEIR REGULAR TAX DEDUCTIBLE IRA MONEY AND CONVERT THAT IN ADDITION TO CONVERTING THEIR NON_DEDUCTIBLE MONEY AT NO TAX. IF THE CONVERT THE PREVIOSLY TAX FAVORED IRA MONIES, THE TAX WOULD BE PAYABLE IN EQUAL INSTALLMENTS IN 2011 AND 2012.

AND WE HAVE A PRETEND OFFSET VALUE FOR THE PAYMENT OF THE UNCHANGED ACTUAL TAX "EARLY" - there is an increase in July through September 2006 estimated tax payments for corporations with assets over $1 billion (as well as some future changes starting in 2010).

Plus tiny real tax increases to "offset the $70 billion give away to the rich" - a modification of certain foreign sales corporation (FSC) provisions including elimination of grandfathering provisions; and an increase from under 14 to under 18 the age of minor children whose unearned income is taxed at the parent’s rate (BUT IS THIS A SCREW THE MIDDLE CLASS TAX INCREASE?).

I do love my GOP! :-(