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Tax Question
Anyone here who knows tax (really knows, I mean, not knows, like me, merely how to spell the word) if this is nonsensical or realistic?
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"Hooray for the AMT? Taxpayers have to either pay their regular income tax or the "Alternative Minimum Tax" (AMT)--whichever is higher. The AMT was designed to catch rich people who use loopholes and deductions to escape taxation. But because the AMT isn't indexed for inflation, more and more middle class taxpayers will have to pay it. Conventional wisdom holds that Congress will have to step in and correct this situation before middle class taxpayers revolt. Indeed, the need to do something about the horrible AMT is considered the driving political engine behind proposals for overhauling the regular tax code, according to the NYT's Edmund Andrews. ... But why isn't the unindexed AMT a feature rather than a bug? That is, why isn't it a good vehicle for gradually introducing tax reform and simplification? How? Keep all the deductions and credits in the tax code, but simplify the AMT so it's the tax code reformers really want. And keep it unindexed. Then, as the AMT hits further and further down the income scale, more and more taxpayers will have to shift to the reformed AMT system--until most Americans don't even bother with their old regular tax calculations. They just pay the simplified tax, which is maybe a little bit higher than the old complicated tax. (You want simplicity, you pay a bit more!) Presto--the old tax code has been gradually put out of its misery like the proverbial frog in slowly heated water. ...Don't fight the AMT--surrender to it!"
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