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Thursday, December 21, 2006
CTJ's AMT Reform Proposasl
AMT reform is a thorny issue, discussed at length here, which will confront Congress in 2007.
Now comes A Progressive Solution to the AMT Problem from Citizens for Tax Justice (CTJ). The key elements of their four-year, revenue-neutral plan:
- extend the 2006 AMT exemptions through 2010, indexed for inflation
- remove the 15 percent tax rate on capital gains and dividends, treating from capital gains them the same as other income, but only for AMT purposes
CTJ's proposal clearly does some important things. Why AMT was not originally indexed -- let alone has not been indexed since -- is a good question. So let's finally do it. The plan is also more progressive than AMT. And striving for revenue neutrality in any AMT reform solution probably makes just as much sense since we may all soon will be living under PAYGO budget process constraints.
Query whether there may sufficent support in Congress today for a doubling of any given individual income. And the proposal does not address what to do about what remains of the AMT problem after 2010, which still could be several hundred billion dollar problem.
Still, fiscally responsible, progressive AMT reforms ideas have been few and far between (but not unheard of from this corner) so we applaude the effort.
Posted by Dana Chasin
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