By Richard Rubin
 
House Minority Whip Roy Blunt received what he considered a gift on Thursday morning: a ready-made GOP talking point, courtesy of Ways and Means Chairman Charles B. Rangel.

 

And Blunt was grateful.

 

“Very seldom in politics do your opponents give you this kind of gift,” said Blunt, R-Mo., who proceeded to attack Rangel’s $1.3 trillion tax package (HR 3970), offering a preview of a GOP campaign theme about tax-and-spend Democrats.

 

The proposal embodies Democratic tax priorities but is complex and unlikely to become law. Democrats constructed the bill to bolster their philosophy of tax fairness: to repeal the alternative minimum tax (AMT) and add provisions to ensure that more than 90 million taxpayers benefit while fewer than 2 million receive tax increases.

 

“Just don’t say it’s a dramatic tax increase, if I’m running around saying that 90 million people are going to get a tax cut,” said Rangel, D-N.Y. “And if you believe that, tell me, who are the people that are getting this tremendous tax increase? And I can count, and 90 million people are not included in that number.”

 

Washington Arithmetic

 

That’s the simple part of tax overhaul math. Yet part of the Democratic defense of the plan rests on how they explain the details of the country’s finances. The winner in the 2007-08 tax debate may be the party that best translates the Washington-speak of budgets, baselines and revenue neutrality for voters.

 

It won’t be that difficult for taxpayers to understand, maintains Ways and Means member Artur Davis, D-Ala. “You have to give the American people credit,” he said.

 

But Republicans are clearly trying to portray this package as a massive tax increase.

 

“The last thing the American people need right now is a $1.3 trillion tax increase that would be a dangerous jolt to our economy,” said Senate Minority Leader Mitch McConnell, R-Ky. “If such a proposal were to pass the House, it would be dead on arrival in the Senate.”

 

Congress created the AMT in 1969 (PL 91-172) to prevent high-income taxpayers from using legal deductions and credits to avoid all taxes. The AMT is a parallel tax system that causes many people to figure their taxes twice and required 4 million people to pay more in 2006.

 

The tax was never indexed for inflation, leading Congress to enact temporary “patches” to prevent it from reaching deep into the middle class. The last patch expired in 2006, and if Congress doesn’t act, the tax would hit 25 million taxpayers in 2007.

 

But budget projections rely on current law, so they assume revenue from two situations that seem politically unlikely: the continued growth of the AMT and the expiration of all of President Bush’s signature tax cuts (PL 107-16, PL 108-27) after 2010.

 

That builds two automatic tax increases into the budget baseline. Under the Democrats’ pay-as-you-go rules, any bill that cuts taxes from that baseline must include offsetting tax increases or spending cuts.

 

Rangel’s bill would simply change who pays those taxes. The AMT would disappear and be replaced with a surtax on married couples earning more than $200,000 a year. That tax rate would peak at 4.6 percent, and most of the costs would fall on couples earning more than $500,000.

 

Republicans say the AMT should be repealed without offsetting revenue. Such a move would prevent tax increases but also would increase the deficit.

 

Republicans are aiming their campaign against the tax package at moderate Democrats, whom they must defeat to regain the majority in Congress. “Will the people who have posters out in front of their office that claim to be conservative Democrats sign on to the Democratic leadership’s plan for taxation in America?” asked Adam H. Putnam of Florida, chairman of the House Republican Conference.

 

It’s unclear how quickly Democrats can reach consensus on Rangel’s bill, which will not come to a floor vote this year. When asked about the initiative, Speaker Nancy Pelosi said, “I certainly support his plan.” But Pelosi, D-Calif., pointed out that the proposal had not been presented to the Democratic Caucus, where she acknowledged that it’s likely to generate debate.

 

Rangel’s Senate counterpart, Finance Chairman Max Baucus, D-Mont., responded to questions about the proposal by saying only, “Oh, it’s interesting. Very interesting.”

 

Part of the Democrats’ challenge will be to convince taxpayers that their plan avoids catastrophe. Rep. Chris Van Hollen of Maryland, who chairs the Democratic Congressional Campaign Committee, described the AMT as a “tax guillotine” prepared to strike millions of Americans, positioning Democrats as generous lawmakers preventing an execution.

 

The tax debate also hinges on both parties’ approach to extending Bush’s tax cuts, which expire in 2010. Republicans contend that taxes would rise even more if Democrats do not extend the cuts. Democrats generally want to continue the lower rates for lower- and middle-income workers but let them expire at the top.

 

Rangel was coy Thursday about his strategy. “I’m 77 and I feel good, but I don’t feel comfortable dealing with 2010 right now,” he said. “2010 comes when 2010 comes.”

 

Adam Graham-Silverman and Kathleen Hunter contributed to this story.