Bush Tax Plan Less Costly To Treasury
May 17, 2000
The tax plan being proposed by GOP presidential candidate George W. Bush significantly reduces federal tax brackets -- but does not adjust the alternative minimum tax (AMT), analysts report. That will reduce benefits to higher-income taxpayers. At the same time, it will not be as expensive from the federal government's standpoint, in terms of Treasury revenues.
- In effect, millions of high earners who otherwise might enjoy savings due to a raising of the brackets will, instead, find those savings eaten up by the minimum tax -- which is designed to ensure that high-income households and companies don't escape paying taxes.
- The plan turns out to be $400 billion less expensive over 10 years than the $2.2 trillion that rival candidate Al Gore estimates.
- Robert McIntyre, at the group Citizens for Tax Justice, estimates that about 25 million taxpayers -- more than 20 percent of those paying some tax -- would be paying the AMT under Bush's plan, up from about 800,000 currently.
- While much of the rest of the tax code is indexed for inflation, the AMT is not -- which means that more and more Americans are being subjected to it each year.
The number of taxpayers affected by the AMT has jumped from 140,000 in 1987 to 823,000 in 1999. That number was estimated to balloon to 9 million by 2009, even with no change in the tax code.
Source: Glenn Kessler, "Alternative Levy Cuts into Bush Tax Cut," Washington Post, May 11, 2000.
Browse more articles on Government Issues