Saturday, November 11, 2006

Fixing the AMT

This is good.

Democratic leaders this week vowed to make the alternative minimum tax a centerpiece of next year's budget debate, saying the levy threatens to unfairly increase tax bills for millions of middle-class families by the end of the decade.

The complex and expensive tax was designed to prevent the super-rich from using deductions, credits and other shelters to avoid paying the Internal Revenue Service. But because of rising incomes, the tax is expected to expand to more than 30 million taxpayers in 2010 from 3.8 million mostly well-off households in 2006.

Fixing the AMT has long been a top priority for Sen. Max Baucus (D-Mont.), who is in line to head the Senate Finance Committee. Last year, Baucus co-authored a bill to repeal the tax with Senate Finance Chairman Charles E. Grassley (R-Iowa).

I know that more tax cuts for the upper middle class doesn't top everyone's priority list, but the growing number of people being affected by the AMT makes it just a very very stupid tax. You have to go through all of the song and dance of doing your taxes and then right at the end the IRS tells you "psyche!" and gives you a different number.

If Republicans weren't such pricks there'd be a responsible way to do this - kill the AMT but increase marginal rates somewhere to make it roughly revenue neutral.