AMT still widely misunderstood
In articles on the Trump tax plan today, NYTimes writers Julie Hirschfeld Davis and Alan Rappeport repeat the myths of the AMT. They are surely relying on sources for the analysis rather than their own research, and they misrepresent what the hopefully doomed tax regulation has done.
They write, "...alternative minimum tax, a parallel system that primarily hits wealthier people..." in one article and in another article just Rappeport writes that "the alternative minimum tax makes it harder for very rich individuals to game the tax system and pay less tax." This law was implemented in 1982 and for its first 30 years was never indexed for inflation. In 2012 an Obama rule began to require indexing but only with that year being the base. Having railed against this regulation here for many years and doing the research, the law penalizes taxpayers with income beginning at $150,000 if they live in areas with high state and local taxes, and has no impact at all on at all on taxpayers with incomes over $750,000. Those at the higher end of that range are certainly wealthy people but the tax has no impact on the wealthiest, including the vaunted or reviled 1% in most areas.
NYT reporter Neil Irwin accurately points out that the AMT is so complicated that without hiring a tax firm or a capable accountant it is hugely time consuming to calculate and even with the best tax preparation software the job will not be completely done. It is also incredibly annoying that to most people the calculations required are inexplicable. It is by that measure an anti-democratic rule. While the Trump tax plan has both outright flaws and many potential ones, doing away with the AMT could only be greeted with "good riddance".
They write, "...alternative minimum tax, a parallel system that primarily hits wealthier people..." in one article and in another article just Rappeport writes that "the alternative minimum tax makes it harder for very rich individuals to game the tax system and pay less tax." This law was implemented in 1982 and for its first 30 years was never indexed for inflation. In 2012 an Obama rule began to require indexing but only with that year being the base. Having railed against this regulation here for many years and doing the research, the law penalizes taxpayers with income beginning at $150,000 if they live in areas with high state and local taxes, and has no impact at all on at all on taxpayers with incomes over $750,000. Those at the higher end of that range are certainly wealthy people but the tax has no impact on the wealthiest, including the vaunted or reviled 1% in most areas.
NYT reporter Neil Irwin accurately points out that the AMT is so complicated that without hiring a tax firm or a capable accountant it is hugely time consuming to calculate and even with the best tax preparation software the job will not be completely done. It is also incredibly annoying that to most people the calculations required are inexplicable. It is by that measure an anti-democratic rule. While the Trump tax plan has both outright flaws and many potential ones, doing away with the AMT could only be greeted with "good riddance".
posted by John Borden at 4:08 PM
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