Epic Alternative Stimulus Package Fail

Over at his new digs at The Plum Line, Greg Sargent details the analysis of the GOP's vaunted "alternative stimulus package" full of tax cuts. Only one problem: in their usual style of total incompetence and shoddy workmanship, it turns out the GOP's tax cutting stimulus would in fact raise taxes on over twenty million Americans due to failure to account for the Alternative Minimum Tax (AMT) in their version of the bill.

This is a bit in the weeds. But here goes. According to Dems on the House Ways and Means Committee who have crunched the numbers, the GOP plan, which would reduce income taxes, would as a result shove millions over on to the Alternative Income Tax rate, which would be higher for them. Dem Ways and Means spokesperson Matthew Beck emails me this statement making the case:

In 2008, 4.2 million Americans had to pay the Alternative Minimum Tax (AMT). The Republican proposal would lower marginal tax rates for individuals, but would not reduce AMT rates. Current law requires you to pay the greater of the two rates, so many of those receiving this lower marginal rate would now be held liable for the AMT.

There is no question that Congress needs to — and will — act to prevent the number of taxpayers hit by the AMT from growing to an estimated 26 million this year. However, we confirmed with the non-partisan Joint Committee on Taxation that 26 million people would still be forced to pay the AMT this year under the GOP bill. Essentially, their tax bill would give with one hand and take away with the other, leaving 26 million families without the tax cut they promised in their bill.

Make of this argument what you will, but the fact is that this is going to be an official attack line coming from the DCCC, which is right now drawing up press releases to push this line in the districts of at least a dozen House members across the country who backed the GOP alternative. The hits accuse each member of voting “to raise taxes on 22 million hard working Americans.”

That's right...by lowering tax rates for Americans but NOT the AMT rate, the GOP bill would actually drop the tax rate under the trigger point where the AMT would kick in...and 22 million Americans (families making $70k-$150k or individuals making $46,500-$75,000) would actually end up paying MORE taxes under the AMT as a result. It's a silly oversight...but it's one that would be very costly to millions of Americans.

But what did you expect from the GOP? Actual competence?

EPIC. FAIL.