Under current tax law, 23 million taxpayers will owe the alternative tax for 2007, up from 4 million last year. The tax was originally intended to apply to multimillionaires. But most of this year’s alternative taxpayers make between $100,000 and $500,000 and about a third make less than $100,000. They all have good cause to feel rooked and to expect help from Congress.
I’m not a big fan of the AMT. I think it does more harm than good. If there is a legitimate problem with too many wealthy people taking too many tax write-offs, the right solution would be to raise the top tax bracket or to close the exploited tax loop holes. Inventing a parallel tax system might be great for tax accountants but as a tax policy solution, it is a terrible waste of time and resources. If those tax exemptions are legitimate; then so be it. A person who is entitle to write something off deserves to do so even if they are filthy rich.
I fear that the solution to the AMT crisis will be to create a SAMT (secondary AMT) for people that find that the AMT unfairly applies to them.