R.I.P. for AMT
Republicans and Democrats agree -- the Alternative Minimum Tax must go. But while Republicans have unveiled a plan to eliminate it, Democrats say it should just be replaced. Steve Tripoli reports.
U.S. House of Representatives (Brendan Smialowski/AFP/Getty Images)
TEXT OF STORY
Steve Tripoli: Everyone in Washington says they want to fix the Alternative Minimum Tax. Thirty-five years ago, it applied to only a handful of rich people. But Congress didn't index it to inflation, and now millions of families are vulnerable.
Marketplace's Steve Tripoli says this week, Republicans unveiled a plan to eliminate it.
Steve Tripoli: Yes, you heard that right. Democrats and Republicans agree they both want to end the AMT.
Wisconsin Republican Paul Ryan says his party can do it without raising other taxes to replace it.
Paul Ryan: The conventional wisdom in Washington, that we seek to challenge with this bill, is this whole notion that the government needs to have all this money coming in to it.
Ryan says there's a clear alternative to replacing the AMT's cash flow:
Ryan: Instead of focusing on how to raise all this revenues, Congress should be focusing on how to control spending.
Ryan argues that the AMT's essentially a new tax on the middle class, since more and more families must pay it each year. So why replace it?
But Democrats say there are good reasons to replace the tax -- like huge budget deficits, the Republicans' own spending habits, and the fact that the government used AMT revenues to help justify President Bush's tax cuts.
I'm Steve Tripoli for Marketplace.
