7 Big Tax Changes Money Central Wants to See, Part 6

Here's part 6 of a piece from Money Central that lists the seven tax changes they would like to see:

Dump the Alternative Minimum Tax (AMT). Republicans and Democrats agree that the tax, designed to ensure all taxpayers pay some tax, is way out of hand. They've spent the last five years or so talking about how to fix it. It’s almost certainly to be on the agenda of proposals that will come out of the Advisory Panel’s report. But I’m not optimistic Congress will do much about the AMT. Just extending the current increase in the AMT exemption would cost $385 billion over 10 years, and 7 million taxpayers would still be subject to the AMT hit in 2010. If it were repealed altogether, it would cost the government $611 billion over 10 years. If the Bush tax cuts of 2001 and 2003 are extended, the loss of revenue due to the AMT would hit $954 billion, according to the Center on Budget and Policy Priorities. With our current deficit, that’s a lot of revenue to make up.

Yes, it's a lot. But the AMT needs to be fixed/changed/repealed as it's impacting the middle class more and more every year. Maybe a small national sales tax would cover the elimination of this tax?

Click here to read part 7 of this series.

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Comments

"Yes, it's a lot. But the AMT needs to be fixed/changed/repealed as it's impacting the middle class more and more every year. Maybe a small national sales tax would cover the elimination of this tax?"

So transfer the tax burden from the upper and middle classes to everyone, which helps the middle class, but seriously burdens poor people. ???

[FMF]

The purpose of the AMT is to make sure the ultra-rich don't get by without paying at least a minimum level of taxes. Currently, it's set up to impact many, many more people than the extremely wealthy and as such needs to be changed in my opinion.

Of course, it can't be changed in a vacuum -- it will need to be part of an overall set of tax changes.

I tend to favor more of a consumption-oriented tax-weighted system rather than an income-based one. I understand that this is a regressive tax and thus is not popular with the masses, but in my view it encourages more saving and less rampant spending (something we want to happen over the long term) versus discouraging people from working more to earn more (which is what the current system does -- at least in part).

If you have any better/alternative suggestions, I'm all ears.