Feeling An Economic Chill

Tales that help me get it through my head that Democrats can't do diddly to reslice the economic pie.

The AMT: It's Not Just For The Rich Anymore
Have you ever paid the Alternative Minimum Tax? I have, and it sucks. Now admittedly the Frogette and I are doing OK, but the AMT was never meant for middle-income folk. It was meant for super-rich at a time when there were so many loopholes in the tax code (late 1960s, early 1970s) that they often got away with paying no tax. Now we have multiple proposals in Congress that deal with the AMT, and all but one are practically dead on arrival.

Charles Rangal (D NY) wants to repeal the AMT and offset the cost by placing a tax surcharge on families making over 200K/year . He also wants to sock it to the hedge-fund industry by taxing their lucrative pay packages as ordinary income rather than as capital gains, as it is now. (Did you know that the biggest income disparity in the US is the gap between corporate CEO's with their million dollar pay packages and hedge-fund managers with their billion dollar pay packages, all taxed at 15%. Sobering isn't it?) Predictably, Republicans are howling about "class warfare", but in an ironic twist top Democrats have been slow to endorse Rangal's proposal due to the huge campaign donations they've been getting from those very same hedge-fund f*ckos.

The only AMT proposal that has a chance is the Senate's, another extension of the relief package that has been in place for the majority of the decade. But here Republicans are threatening to hold up the bill unless Democrats agree to make all of the Bush tax cuts for the rich permanent. Considering the recent behavior of Senate Democrats, we'll probably see them cave and send this one to the House...where it will die.

Guess the only sure fire way way avoid the AMT is to do what the Frogette and I have done: Become a one income family.

Where's My Goddamned Fixed Rate?!
There was a reason President Decider "encouraged" but didn't mandate that the lending industry provide relief to families struggling to stay ahead of ballooning mortgage payments. By keeping government out of picture, he could 1) Avoid any blame for delays or inaction on getting relief to homeowners and 2) Keep Democrats from interfering to spread economic relief evenly and equitably. So, as it stands, lenders like Countrywide are putting in place programs to help some of their borrowers refinance, while others are simply letting their borrowers twist.

But the question I want answered--and I know I'm going to sound like whining pansy--is: How come those of us who were careful when we took out our mortgages don't get some kind of reward? I mean... I didn't put down a pittance. I didn't buy more house than I could afford (in fact I bought less than I wanted). Admittedly, I took out an ARM, but on a much longer term than typical residents of Babylon by the Bay. So in a way, I gave my lender a gift: Stability. Shouldn't I see some lending relief here? How about a nice fixed rate, thank you very much? Shall we take bets on the likelihood?

(And, before I forget my manners, many thanks to Fran for letting me post on her wonderful blog. - K.)