Thursday, May 11, 2006

The Republican Agenda for 2006: Tax Increases for Everyone Else - New York Times

The Republican Agenda for 2006: Tax Increases for Everyone Else - New York Times:
One way or the other, tax increases are coming. The nation's budget deficits are too big to outgrow, and the latest tax cuts — which Congress is likely to sign off on today — will dig the hole deeper. Neither Congress nor the public has the stomach to slash government programs anywhere near enough to bring spending in line with revenues. The only real question, then is this: Whose taxes will be raised in the future to pay for today's tax giveaways?

Here's a hint: If Congressional Republicans get their way, the people who benefit the most from today's tax cuts — mainly wealthy Americans with lots of investment income — will get special protection from future tax increases.

That protection is built into the pending tax cut package. House and Senate Republicans have included a provision to encourage all high earners — everyone making more than $100,000 — to shift their regular I.R.A.'s into newer, more advantageous Roth I.R.A.'s.

Current law doesn't let well-off Americans switch to Roths because it assumes — correctly — that they don't need extra help from the government to build their savings. Changing that rule will be a great deal for them. Income tax is due up front on the amounts that are shifted into Roth accounts, giving lawmakers a temporary burst of revenue to mask the true cost of their continuing tax-cutting spree.
The snatch-and-grab operation continues.
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