Slimy senators don’t only use a tax reduction to entice H.R. 3997 passage but threat of a tax increase
Posted on October 1st, 2008 by bile Tags: Alternate Minimum Tax, AMT, bailout, Congress, economics, Emergency Economic Stabilization Act of 2008, H.R. 3997, House of Representatives, malinvestment, mark to market, misvaluation, NBC, regulation, Republican Party, Sarbanes Oxley, SenateHoyer, though, said on NBC’s “Today” show he was concerned that the tax issues could complicate the chances of final congressional passage when the legislation comes back to the House floor for a vote.
“There’s no doubt the tax package is very controversial,” he said, adding that “there’s no doubt in my mind that the Senate added this because they thought that’s the only way they could get it passed.” He said he wasn’t pleased the tax provisions were attached to the bill.
Adding a set of popular business tax breaks and legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax promised to win House GOP votes for the plan even as it angered moderate “Blue Dog” Democrats concerned about the tax cuts adding to the deficit.
I reported earlier on the some of the changes made to the House amendments by the Senate. Unfortunately the only way to find out is through piecing together random news articles as at last I checked the actual bill to be voted on was not publicly available. So… I hadn’t seen that the AMT was part of this supposed tax reduction. We’ve all have heard the horrors of the AMT and yet Congress has been unable to do anything about it until now? It’s not even a carrot for passage, as a real tax reduction would be, but the promise not to use the stick… as hard. Another example where government regulation has lead to an unforeseen problem that would simply not have existed in any sort of resemblance of a free market. Now they are trying to sweeten this poison bill with it. Getting rid of the AMT is a great idea… but not on the back of one of the most egregious corporatist bills to come our way in a generation.
Speaking of negative unforeseen consequences.
The U.S. Securities & Exchange Commission Tuesday decided to ease “mark to market” accounting rules which have hurt banks, mortgage lenders and the housing sector during the downturn.
Mark to market is a Sarbanes Oxley accounting rule that requires holdings, assets, and loans be valued at their current value. It was aimed at keeping company’s books on the up and up but it has devastated banks and mortgage lenders in the housing slump.
On Tuesday the SEC said companies and financial institutions have some leeway in assessing value, not just the current market, which is of course way down.
There is also some talk in Congress of a temporary or permanent mark to market repeal to allow for a more long-term valuation of assets and loans.
What a surprise? Government regulation which manipulated the market values of assets caused the market to negatively react to that misvaluation. It’s unfortunate there isn’t a way to translate the economic distortion into something the politicians could understand. Like a punch in the face.
