NCPA - National Center for Policy Analysis

THE AMT 'FIX' IS IN

June 11, 2007

This year an estimated 23 million taxpayers, including many in the middle class, will have to pony up an added $73 billion in taxes because of the Alternative Minimum Tax.  2010, some 39 million people will fall into the AMT trap, almost all of them middle-class families with kids, says Investor's Business Daily (IBD)

Unfortunately, the Democrats want to spend more and to them the AMT is just too juicy a source of revenue to cut.  So instead of seeking to get rid of it, as many economists propose, Democrats basically want to replace the AMT with a 4.3 percent surtax on the wealthy -- that is, those with incomes $500,000 and higher.

The Democrat's plan is foolish because the rich already pay far more than their fair share, says IBD.  According to the Joint Committee on Taxation:

  • Those with incomes of more than $100,000 paid 82 percent of all income taxes, and 44.4 percent of all payroll taxes, even though they make up less than 10 percent of all taxpayers.
  • Those who earn $500,000-plus pay 33 percent of all taxes -- but make up less than 1 percent of all tax returns.

Meanwhile:

  • Some 45 million mostly low- and middle-income Americans pay nothing. Another 15 million don't make enough to even have to file -- that's 60 million.
  • And according to the Tax Foundation, the typical low-income household pays $1,684 in federal taxes, yet receives $17,724 in federal benefits, not including "other federal programs such as education and public transportation."

The Democrats' us-against-them rhetoric is an insult to every hard-working family whose providers have gone to school, worked hard, played by the rules and saved to climb the income ladder.  That 4.3 percent surcharge on the "rich" is really a tax on success, says IBD.

Source: Editorial, "The AMT 'Fix' Is In," Investor's Business Daily, June 08, 2007.

 

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