Time is running out for Congress to fix the mess it has made with the Alternative Minimum Tax. This tax was designed to prevent the super rich from paying no taxes whatsoever. When it was enacted in 1969, it only applied to 155 families.
But Congress forgot to index the tax for inflation. Consequently, it applies to more and more families each year. In essence, this "stealth tax" allows Congress to raise our taxes automatically, without even voting on issue.
If Congress fails to act, 25 million Americans will be subject to the tax for 2007. That's up from 3.5 million for 2006. In Kentucky, the AMT will hit 174,000 taxpayers.
Year after year Congress has enacted "patches" to prevent the AMT from sweeping middle class families into its grasp. Instead of applying an annual band-aid, Republican Senate Leader Mitch McConnell has urged Congress to repeal the AMT altogether.
But the Democratically "led" Congress has stonewalled on reform so long that the IRS has said that it won't be able to process tax refunds in a timely manner.
Instead of passing out cute buttons that say "Article 1," John Yarmuth needs to prod his cohorts in the House to fix the AMT, by repealing it.
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The AMT is a ridiculous provision, but then the entire tax code is absurd. In a perfect world we would have a flat tax. Take your income for the year, multiply it by a factor, write a check for that amount. No deductons, no credits. Of course, we would have to start a government program to assist unemployed accountants, but that is OK, it is a government program I could support.
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