Wednesday, February 14, 2007

Myths and Realities About the Alternative Minimum Tax (AMT)

Paraphrased from the Center on Budget and Policy Priorities. If you believe any of the following about the Alternative Minimum Tax (AMT) you're wrong.

Myth 1: The AMT is (or is rapidly becoming) a “middle-class” tax.

More and more middle-class tax-payers are paying some AMT-triggered taxes, but the bulk of the AMT tax receipts are from upper income earners.

Myth 2: The growth in the AMT was unanticipated and accidental, and so the cost of repeal should not have to be offset.

The Republicans deliberately used the AMT to mask the effects of the 2001 and 2003 tax cuts. It is doing what it was anticipated to do.

Myth 3: The only way to protect middle-class households from the AMT is to repeal it.

In truth, the AMT is doing just what is was supposed to do: keep top earners from escaping taxation. It may need reform as a way to redefine what "top earners" means, but it should not be repealed as the Republicans want to do.

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