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Financial Literacy - Taxes
No new taxes? Why not?
Politicians who pledge no new taxes are either neglecting the facts or making promises they can't or shouldn't keep.
Taxes made easy

Interview: Adam Hughes

With his early career spent in public advocacy, Adam Hughes continues to look out for the public interest as the director of fiscal policy at OMB Watch, a watchdog organization that monitors the federal government.

At a glance

Hughes oversees all aspects of his organization's work on the federal budget, tax policy, income and wealth trends, and government performance issues. That includes work to educate the media, citizens and lawmakers about the fiscal challenges we face as a country. It also includes developing policies that are fiscally responsible and make sense over the long term. The third component, the watchdog function, is about understanding what the government is doing and why.

Hughes admits that tax policy isn't sexy and has fewer grassroots supporters than does children's rights, for example. But tax policy affects us all and taxpayers would benefit by being informed if not engaged. Here he talks about what you need to know now.

The OMB in OMB Watch refers to the White House Office of Management and Budget, which oversees federal regulation, the budget, information collection and dissemination, proposed legislation, testimony by agencies and much more. So you oversee the overseers?

That's the origin of the organization and we've evolved to do much more than watch the OMB now. Back in the '80s there were a number of Reagan measures that impacted the function of government. A number of groups thought it would be helpful to have an organization that understood OMB and how it functions.

Over the years, the organization has expanded to include the entire federal government. We work to understand how the federal government works, rather than just saying this agency should work like this and that agency should work like that.

You promote active citizen participation in our democracy. Which issues are most pressing to taxpayers right now?

Top of the list would have to be the alternative minimum tax (AMT). The reason it's at the top is the number of people it could impact next year.

AMT was designed back in the '60s to make sure that rich people couldn't deduct their way out of income tax. Because it wasn't indexed for inflation, a lot of middle-income Americans, who it wasn't originally designed to affect, now are having to pay AMT. Congress has been patching the problem with one-year threshold increases to raise the amount determining who pays that. They've been waiting all year to legislate and unless they reset the limit, 19 million new individuals would pay, for a total of 23 million people paying the AMT. [Editor's note: Within a week of the original publication date of this interview, Congress passed legislation that extends AMT relief for one year to some 23 million taxpayers.]

-- Updated: Dec. 26, 2007
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