The US House
of Representatives will approve a bill raising taxes for buyout firms and hedge-fund
managers next month, Ways and Means Committee chairman Charles Rangel (D-New York)
has said. The $48 billion measure would generate enough revenue to prevent many
middle-class households from being subject to a $2,000 average tax increase under
the alternative minimum tax (AMT) this year, he said.
77, says he''s looking for a way to prevent the AMT from coming down heavily on
23 million people. He said he plans to wait until next year before seeking a vote
on a sweeping tax overhaul, which he calls "the mother of all reforms".
Thursday 25 October, the proposal would raise taxes on higher-income families
and some businesses, while cutting bills for the working poor and lowering the
corporate rate. Republicans say Rangel and his party are trying to raise taxes
by more than $1 trillion.
said he expects to win the support of Treasury Secretary Henry Paulson for a provision
that would cut the corporate tax rate to 30.5 per cent from 35 per cent. But Paulson,
who has advocated a lower corporate rate in the past, denounced Rangel''s proposal,
saying it would "hinder America''s ability to compete" and "undermine
George W Bush also rejected Rangel''s overhaul proposal on Friday, saying it was
a "massive tax package that raises taxes on more than a million small-business
owners, among others".
Rangel said his overhaul plan simplifies the tax system and eliminates provisions
that benefit only a few taxpayers. He says he wants to "rearrange the code"
so that middle-income taxpayers and the working poor get more benefits, while
wealthy households shoulder more of the burden.
proposes a 4 per cent tax-rate surcharge on adjusted gross income over $200,000
for married couples. The surcharge would rise to 4.6 per cent for couples with
incomes of more than $500,000. Overall, said Rangel, his measure will cut taxes
for 90 million US households, letting more poor families claim the $1,000 per
child tax credit, doubling the earned income-tax credit for the working poor,
and boosting standard deduction by $850 to $11,550.
scoffed at Republican claims that his proposal is "the mother of all tax
hikes". He said his proposal complies with House budget rules known as ''pay-go'',
that require all tax cuts be offset by separate tax increases or decreases in
those who believe they''re getting a tax increase come forward," he said,
"not Republican rhetoric, but companies and individuals who believe that
the tax plan is unfair." "I know one thing," he pointed out, "90
million people will appreciate the tax cut."
said the narrower measure to curb the minimum tax for one year would be introduced
next week. The proposal would more than double the tax rate on so-called carried
interest, the compensation that executives at buyout and venture-capital firms,
as well as real estate and oil and gas partnerships, receive for managing investments.
It also would require hedge-fund managers to pay tax on income they defer in offshore
dismissed suggestions from both Republicans and Democrats in the Senate that the
pay-go requirement should be waived to pass temporary minimum-tax relief. "It
will be very difficult for the Democratic leadership to call this an emergency
and bypass the pay-go rules," Rangel said.
said he was "not impressed" with criticism by Senate Democrats like
Charles Schumer of New York and John Kerry of Massachusetts that increasing taxes
on private-equity firms and hedge funds could disrupt financial markets and hurt