Don’t Like the AMT? Write Your Congressman!

The alternative minimum tax (AMT) was enacted decades ago, to attempt to assure that folks with the power to orchestrate their tax liability, and assure that they paid little or none, would be trapped, and thus be required to pay at least something.

But according to the Congressional Research Service (CRS), unless Congress acts (Who would expect they will, given their recent track record?), the combined effects of inflation and reductions in the “regular” income tax rate will cause something like 30 million taxpayers (approximately 20% of all taxpayers) to be trapped by AMT in 2012!

The problem seems to be that Uncle Sam has become just a little too happy to receive AMT revenues – according to CRS, if AMT were repealed without some other adjustments to the regular income tax scheme, the lost revenue would be over $1.3 trillion between 2011 and 2022 if the “Bush tax cuts” are not extended, and over $2.7 trillion if they are.