The Alternative Minimum Tax: Reform or Repeal?
The alternative minimum tax (AMT) is a complex income tax imposed on top of the regular income tax. Without action by Congress, 23 million taxpayers will pay the AMT in 2007 and be hit with an average burden of more than $3,000. Some policymakers have proposed partial AMT relief, and the Bush administration supports replacing $1 trillion of future AMT revenues with other taxes.
By contrast, Rep. Phil English supports repeal of the individual and corporate AMTs without revenue offsets. Now is a good time for repeal given the flood of federal revenues from strong economic growth. English will discuss the prospects for reform and the shortcomings of proposals that fall short of full repeal. Chris Edwards and Dan Mitchell will discuss the workings of the AMT and how the tax fits into the broader budget picture this year and coming years.