Paygo Blinks on the AMT

Having just taken the US Congress to task for its lack of accomplishments this year, I was pleased to see that the House finally did pass another "patch" to help taxpayers stave off the AMT monster for another year. For a brief moment it was fun to dream of one's pen (or keyboard) having the power to sway governments and that my humble blog had prodded those rascally Dems into action. Don't worry, I know a dream when I see one.

The Alternative Minimum Tax has been around since 1969 and was originally designed to go after a few very fat cats who managed to shield most, if not all, of their income from the tax man. Since it was never indexed to inflation, it has gradually expanded its impact to the point where it now is the effective tax system for millions of Americans, many of whom are a far cry from fat catdom. But rather than fix the ATM permanently, the Congress plays its annual game of passing a one-year fix, Sort of a fiscal stay of execution.

This year, the House Democrats threatened to adhere to their newly-adopted "Paygo" scheme which purports to tie a tax funding mechanism to every new program. You might recall that the SCHIP Bill, that was vetoed by the President, was going to be funded fully by American cigarette smokers. In the present case, they wanted to raise taxes to offset the loss of revenue that would result from fixing the highly unpopular AMT.

Let me get this straight. We have a tax, which everyone with any sense agrees has grown, through the long-term effects of inflation, to become something that it was never intended to be, but in order to fix it, we need an offsetting tax increase? This is what passes for logic in the vacuous world where Nancy Pelosi reigns and Charlie Rangell runs Ways and Means.

I suppose that we should be thankful to at least get the patch for a year, but I suspect it was passed only to get the President to sign the spending bill containing almost 9,000 earmarks at a cost estimated at $8 billion. Somehow I don't think that Paygo is part of the conversation among those pork aficionados as they line up at the trough. And this is with a veto-wielding president trying to hold against the tide.