Friday, November 9, 2007

Garrett Votes for $1.5 Trillion Tax Increase

For the second time this week, Representative Scott Garrett voted against the people of our District. Today, the House voted against a temporary fix to the AMT to prevent it from creeping further into the middle class of our Fifth District and other parts of the country.

At issue, and why the bill was approved largely along partisan lines, is the provision changing the way 50,000 or so hedge fund managers are taxed. Currently, they pay at the 15% capital tax rate and avoid the AMT. Herb Jackson has the audio of Garrett's statement here, as well as Representative Bill Pascrell smacking his logic around.

As Garrett himself cited, 120,000 taxpayers in our District alone will be subject to the AMT without the patch Garrett just voted against. Here's how the Record broke down the impact not having a patch would have in our District:
If Congress takes no action this year, the alternative minimum tax would hit an additional 21 million taxpayers, including 1.5 million in New Jersey, with higher income tax rates. Here's what that would mean to a family in Ridgewood:

• Married couple, two children, filing jointly with $150,000 in income, $14,000 in property and state income taxes, $20,000 in mortgage interest and $500 in charitable contributions.
• 2006 federal tax bill: $18,690
• 2007 federal tax bill: $21,970
• Difference: $3,280 more

So even if every hedge fund manager in America lived in our Fifth District, which they don't, Garrett would put a $3,280 tax burden on 120,000 taxpayers to protect them? To be fair to Garrett, he has proposed a bill to completely eliminate the AMT. However, Garrett's bill has no chance of getting out of committee because it would cause the national debt to mushroom. This is another example of Garrett's lack of fiscal responsibility.

Playing the semantics game Garrett likes to play, by opposing the tax relief Garrett is in essence supporting a $1.5 trillion tax increase over the next ten years. We can add this to the list of assaults on the family budget by Garrett this year. How many families will see Garrett's lack of support for their family wallet as an issue next year should be an interesting story to follow, if not directly participate in.

2 comments:

Eric Sedler said...

This bill was far too partisan to be passed..and pointless since Senate won't touch it and President will veto it.

I don't like temporary fixes to anything so I'd probably vote against it. (then again I'm a Republcan, albeit a moderate)

You've got some good points, but the House Dems need to work on doing things bi-partisan if they want to get anything done. And the house Republicans need to work with them instead of bickering right back at them.

This is the ultimate vicious cylcle, Republicans did it to Dems in the past and Dems are doing it right back at them now...it's gotta stop somewhere.

rmfretz said...

Good points.

I'd like to see the Dems allow more amendments to Bills. However, what made it partisan was that 15% tax rate and the fact the explosion of the AMT was the only way the second round of Bush tax-cuts could work without forcing us to borrow more.

This was the same package that provided foreign companies a competitive advantage through favorable taxing on hybrid bonds. In essence, this debate was the first salvo regarding that whole package of cuts.

Unfortunately, the stand off for partisan gain will have a very real impact on taxpayers next year if they don't work something out in a hurry. And our District will suffer disproportionately. Garrett needs to stop introducing bills that will go nowhere, and sit down with the Dems and figure out a real solution.