During a discussion about the federal alternative minimum tax, 1310 KFKA host Amy Oliver allowed guest Sean Conway -- chief of staff for Republican U.S. Sen. Wayne Allard -- to make the false claim that Democrats "blocked" congressional attempts to reform the measure. Widespread reporting indicates that, in fact, Republicans in Congress have stymied attempts to repeal the tax, despite Conway's assertion.
On her May 11 1310 KFKA broadcast, host Amy Oliver did not challenge the false assertion of her guest, U.S. Sen. Wayne Allard's chief of staff, Sean Conway, that Democrats "blocked" efforts by last year's Congress to "fix" the federal alternative minimum tax (AMT). In fact, the Republican-led Congress during the past two years stymied bipartisan efforts to reform or repeal the tax, which threatens to affect an increasing number of Americans in coming years.
Oliver, who also is director of operations for the conservative Independence Institute, introduced the topic by calling the tax issue "something that's really kind of gone under the radar" and asking Conway to comment on it.
As Conway correctly recounted, the AMT was enacted "by Congress and ... led mostly by Democrats at the time, to ensure that roughly ... 150 taxpayers ... would pay some income taxes." As he noted, the tax was aimed at "[v]ery rich people" who otherwise would have eliminated their tax payments through legal deductions. But as The New York Times has noted, the interaction of "Mr. Bush's tax cuts" and the fact that the tax "is not indexed to inflation" means the AMT "affects growing numbers of middle-class families."
However, contrary to Conway's charge that Democrats have resisted taking action on the tax, several congressional Democrats have worked to abolish or reform it. As the Times further reported on May 24, 2005, Republican "Senator Charles Grassley of Iowa, chairman of the Senate Finance Committee, has teamed with senior Democrats to introduce a bill that would repeal the tax and forgo hundreds of billions of dollars in additional revenue the tax is expected to generate."
That bill, known as the Individual Alternative Minimum Tax Repeal Act of 2005, was sponsored by Democratic Sen. Max Baucus (MT) and co-sponsored by Democratic Sens. John D. Rockefeller IV (WV), Tim Johnson (SD), Mark Pryor (AR), Charles E. Schumer (NY), and Ron Wyden (OR). Former Sens. Jon S. Corzine (D-NJ) and Jim Jeffords (I-VT) also co-sponsored the bill, which never received a vote in either chamber of the Republican-controlled Congress.
As the Associated Press reported on March 10, 2006, following the Senate Budget Committee's 11-10 party-line vote approval of President Bush's budget, "Democrats castigated [Budget Committee Chairman Judd Gregg's (R-NH)] plan" for "not addressing the ever-increasing impact that the alternative minimum tax is having on middle-class taxpayers." As the May 21, 2006, edition of the Times (accessed through the Nexis database) observed, "[I]nstead of coming up with a permanent solution to the alternative minimum tax, a goal that Democrats and Republicans all support, Congress merely froze the tax for 2006 at a cost of $34 billion."
The Times further noted on August 18, 2006, that although "Republicans and Democrats have both pledged to restrain or simply abolish the alternative minimum tax," the "White House budget and the Congressional 'baseline' forecast released Thursday, which assumes no changes in tax law and a continuation of current spending policy, both presuppose that the tax will remain in place, generating extra revenue."
On October 21, 2006, the Times reported that U.S. Sen. Hillary Clinton (NY) "and other Democrats have fought to roll back the alternative minimum tax, which was originally meant to affect only the wealthy but is increasingly affecting the middle class." Yet as the article noted, "Republican leaders want to do so only as part of a deal to make permanent the broader 2001 and 2003 tax cuts."
The Times similarly reported on November 4, 2006, before the midterm election, that Democrats criticized "Mr. Bush and Congressional Republicans [for] enacting a back-door tax increase by failing to fix the alternative minimum tax, which is hitting more middle-income families." Reporting on Democratic New York Rep. Charles Rangel's support for reforming the tax, the Times cited Rangel's tax counsel, John Buckley:
Mr. Buckley said Democrats wanted a permanent fix in the alternative minimum tax, which was initially established to make certain that affluent Americans with significant deductions did not escape taxes altogether, but which is now reaching a growing number of upper middle-income earners. He said the creeping alternative tax is reducing the benefits of the Bush tax cuts for Americans who fall under it.
''The president has accused us of increasing taxes without lifting a finger,'' Mr. Buckley said. ''But his budget does not include any A.M.T. relief, so he is increasing taxes without lifting a finger.''
Finally, as The Washington Post reported on November 11, 2006, following the election, in which Democrats won control of the House and Senate, "Democratic leaders this week vowed to make the alternative minimum tax a centerpiece of next year's budget debate, saying the levy threatens to unfairly increase tax bills for millions of middle-class families by the end of the decade." According to the Post:
Fixing the AMT has long been a top priority for Sen. Max Baucus (D-Mont.), who is in line to head the Senate Finance Committee. Last year, Baucus co-authored a bill to repeal the tax with Senate Finance Chairman Charles E. Grassley (R-Iowa).
Rep. Charles B. Rangel (D-N.Y.), the presumptive chairman of the tax-writing House Ways and Means Committee, this week put fixing the AMT at the top of his agenda, calling it far more urgent than dealing with President Bush's request to extend the 2001 and 2003 tax cuts, which are scheduled to expire in 2010.
And yesterday, House Democratic Whip Steny H. Hoyer (D-Md.), who is campaigning to keep his leadership post, said Democrats will make "fixing the AMT ... a priority of tax policy next year."
From the May 11 broadcast of 1310 KFKA's The Amy Oliver Show:
OLIVER: I want to talk about something that's really kind of gone under the radar. Sean, what is the alternative minim -- minimum tax that we've heard a little bit about, but not a ton?
CONWAY: Well, unfortunately, Amy, if Congress doesn't do something about this, a lot of taxpayers out there are going to become --
OLIVER: We're going to find out about it.
CONWAY: -- real familiar with the AMT. This is one of those little sleeping giants out there that is about ready to become a, a water-cooler term, as we call it in Washington. Basically, the AMT was enacted in 1969. It was enacted by, by Congress and, and led mostly by Democrats at the time, to ensure that roughly, you know, about 150 taxpayers -- because of the tax code in terms of the deductions -- would pay some income taxes.
OLIVER: And these are rich people?
CONWAY: Very rich people.
OLIVER: In 1969.
CONWAY: Yeah, I mean --
OLIVER: What was considered rich in 1969? What, what were they targeting, what --
CONWAY: Well basic -- basically, anybody that made over $200,000.
OLIVER: In 1969.
CONWAY: Right, and at that time that would have included people like Warren Buffett and Bill Gates and others, and, and they, they passed a tax reform bill -- and that's an oxymoron --
CONWAY: -- that essentially --
OLIVER: I don't even know how you can put it in the same sentence and --
CONWAY: Yeah, I, I know, but -- only in Washington, right, Amy? And the thought process was that, that -- but they forgot to do something -- they forgot to -- what we now do with the tax code -- and that is index it. And --
OLIVER: So it was never indexed for inflation?
CONWAY: Right. And so, you know, $200,000 in 1969 was probably a lot of money.
CONWAY: There are efforts -- there was attempts last year by the Republican Congress to try to get this fixed; it was blocked by Democrats at the time. Now Democrats -- this is on their watch, since they control both the House and the Senate -- the finance committee, and the House Ways and Means Committee, and other folks are looking at different proposals. The, the problem they've got themselves into is, because they waited so long on this, and they created such a large pool of money that has to be offset in the federal budget in order to -- as part, as part of our budgeting process, they've really created a larger problem than -- now, than if they had dealt with it two years ago or three years ago. It's like anything -- it's like the compounding principle in interest. You know, it starts out very slow, very slow, very slow, and then, you know, if -- we've all seen our IRA charts. You know, it's --
OLIVER: Right, right.
CONWAY: Your IRA triples the last three years, you know, because of the compounding interest principle. That's kind of where we're at; we're headed for a cliff here, and it's comin' real quick.