Rangel's Tax Bill: Rob from the Rich, Give to the Less Rich

Ways and Means Committee Chairman Charlie Rangel has been promising for months that his legislation to 'fix' the AMT would promote fairness and equity. It already seems to have won strong support from Speaker Pelosi and the rest of the House Democrats.

Harvard's Greg Mankiw, however, calls attention to the analysis done by the Tax Policy Center:

• The bottom three-fourths of households, those making less than $75,000 a year, are not much affected. They each would receive a tax cut of about $100 per year.

• The next 24 percent, those making between $75,000 and $500,000, would receive much more substantial tax cuts. Those in the $200,000 to $500,000 range, who are in the 96 to 99 percentile of the income distribution, would get a tax cut of about $3,600 per year.

• The top 1 percent, those making over $500,000, would pay substantially more in taxes. Those making more than $1 million would see their tax bill rise by an average of more than $100,000.

The Tax Policy Center is a joint effort of the Brookings Institution and the Urban Institute--hardly the sort of conservative groups that would try to tear down Rangel's proposal. If anything, they would be more likely to sugarcoat it.

And to the extent that Democrats argue that tax reform is needed to address inequities in the current structure, they may want to explain why the rich grew to earn so much more under President Clinton, but have not fared so well under the Bush administration.