06/10/2005
The President’s Advisory Panel on Tax Reform is quickly approaching its July 31 deadline, and one of the items the panel could make a proposal on is the Alternative Minimum Tax.
Originally, the AMT was designed to make sure that wealthy individuals paid a reasonable level of their income in taxes, but the AMT is now reaching beyond its original intent.
“What started out as a misguided attempt to tax the ‘rich’ has become a significant added tax burden on millions of middle-income Americans,” said Senate Finance Taxation Subcommittee Chairman Jon Kyl (Ariz.), who oversaw a May 23 congressional hearing on the individual AMT.
This effect is a tangible one. Taxpayers must calculate their taxes twice – both under normal rules and under the AMT, and pay the higher amount. Estimates indicate that the number of taxpayers subject to the AMT will increase from about 1.8 million in 2001 to more than 41 million by 2013, according to The Alternative Minimum Tax From Individuals, CRS Report for Congress, released Jan. 15, 2004.
Lawmakers and tax experts have recognized the problem but have not yet settled on a solution, and some lawmakers are also concerned about the effect the current AMT regulations have on the economy.
“The AMT … tries to impose a special tax only on the ‘wealthy’… such attempts almost always end up discouraging work and hurting economic growth,” Kyl said.
What do you think of the AMT? Now is the time to tell the president’s tax panel. Use the links below to share your thoughts on the AMT and how it affects you and your business.
Share your comments with your lawmakers too; Congress is the body that makes changes to the tax code.
