Tuesday, April 18, 2006


The issue with the AMT isn't that we need to weep for upper middle class people, it's that it's shitty tax policy. I'd be quite happy to reform the AMT so it doesn't ensnare these people and then turn around and enacting a corresponding tax rate increase which would roughly keep their tax burden the same (no way to do this precisely, of course). The point is that there are incentives built into the tax code, for better or for worse, and these incentives are nuked when after going through the process of calculating your taxes (and the administrative burden of doing so), at the very end suddenly the rug is pulled out from under you.

The AMT probably does end up hitting some people with a higher tax burden than it "should," given the general philosophy behind putting the various credits and deductions into the code, but aside from that as more and more people get pulled into the AMT range the tax code just gets increasingly stupid.