House plans vote on changes to alternative minimum tax

Author: Anchor Kai Ryssdal, Reporter Scott Tong

Published: May 5, 2004

KAI RYSSDAL, anchor: The House plans to vote today on changes to the alternative minimum tax. Yeah, sounds like a snoozer, but Scott Tong reports the experts are worried because the problem is a big one.

SCOTT TONG reporting: Here's a little history: The alternative minimum tax began in the '60s. It went after rich people with tax shelters. It was basically a wealth threshold. If you were over it, you paid the AMT. But incomes grew with inflation; the threshold didn't move, which means today more and more people get hit.

Mr. LEN BURMAN ( Urban Institute) : We decided "The Brady Bunch" would be on the AMT.

TONG: Economist Len Burman of the Urban Institute.

Mr. BURMAN: They have six kids, $75,000 of income. Most of the things that throw people in the AMT have nothing at all to do with tax shelters or special provisions for rich people.

TONG: Next year, Burman says, one in eight taxpayers will be in the AMT club. The bill before the House today would hold the line on who pays the AMT for one year. Estimated price tag: $17 billion in taxes not collected. There's broad agreement a long-term solution is needed. There's also agreement the country can't afford it.

In New York, I'm Scott Tong for MARKETPLACE.