Fixing the AMT by Raising Tax Rates

Research Report

Fixing the AMT by Raising Tax Rates

April 9, 2007

Abstract

House Ways and Means Select Revenue Measures Subcommittee Chair Richard E. Neal, D-Mass., recently told reporters that fixing the alternative minimum tax was likely to involve increases in statutory tax rates rather than cutting back on preferences in the tax code. He said the former was "probably more realistic." Or is it? Raising rates at first seems easier than dealing with preferences that people want to keep. However, the simple fact is that real reform involves winners and losers. The only way to avoid that problem is to keep the status quo. But the status quo isn't tenable either: Taxpayers are increasingly dissatisfied with an AMT that continually raises their tax burdens, and in fairly arbitrary ways.

To reuse content from Urban Institute, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.