A Tax Plan as Trial Run for ’09 Law

A Tax Plan as Trial Run for ’09 Law

By EDMUND L. ANDREWS
Published: October 25, 2007

WASHINGTON, Oct. 24 — The House’s leading Democratic tax writer will propose a sweeping overhaul of the tax code on Thursday that would increase taxes on many people with incomes above $200,000 but cut them for most others.

The bill, to be introduced by Representative Charles B. Rangel of New York, chairman of the Ways and Means Committee, would also overhaul corporate taxes by eliminating many major tax breaks and lowering overall tax rates.

Mr. Rangel has acknowledged that he does not expect to enact such a bill this year, and President Bush would almost certainly veto legislation that raises taxes on the wealthy.

The plan is probably most important as a preview of what Democrats are likely to pursue after the 2008 elections, especially in rolling back a good part of Mr. Bush’s tax cuts for people at the top of the income ladder.

On individual taxes, the heart of his plan calls for eliminating the alternative minimum tax — which was originally created to prevent millionaires from taking too great advantage of tax breaks but now touches people with upper middle incomes and is poised to affect tens of millions of families with incomes as low as $50,000 a year.

Eliminating the alternative tax would reduce projected revenue by almost $800 billion over the next 10 years, according to Congressional estimates.

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http://www.nytimes.com/2007/10/25/business/25tax.html?ei=5065&en=31231402be1b4a0a&ex=1193976000