By Senator Kay Bailey Hutchinson
Albert Einstein once remarked, “The hardest thing in the world to understand is the income tax.” Since Einstein’s admission, our tax code has only grown more complicated and now it is poised to force 20 million middle class Americans to pay an extra $65 billion in taxes over the next four years. And if the tax cuts of 2003 expire, a staggering 115 million taxpayers will be hit with a $1700 tax increase. One of the most pressing domestic priorities facing this extended Congress is passing legislation to address the alternative minimum tax (AMT) that will slap millions of Americans with new taxes.
Although many Americans may not be focused on tax day just yet, the ears of most tax-payers perk up at the words “alternative” and “minimum” used along with “tax.” By its name, many taxpayers might assume the AMT is a good thing. A simpler “alternative” to the complicated and overly burdensome tax code would be welcome news. The idea of paying a lesser or “minimum” amount of taxes sounds good, too. But the AMT is not simpler and it does not allow taxpayers to pay lower taxes.
To the contrary, the AMT denies taxpayers many important deductions, so that middle class families subject to AMT actually pay higher taxes.
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