Newsletter Archive
May 23, 2007
The Tax Policy Center Newsletter
The individual alternative minimum tax (AMT) was originally an add-on tax intended to assure that high income people paid at least some tax. It has morphed and mutated over time, and now is on track to hit 23 million households in 2007. This note describes an option that would return the AMT to its original purpose. In short, the option would repeal the AMT and replace it with an add-on tax of four percent of adjusted gross income (AGI) above $100,000 for singles and $200,000 for couples. The thresholds would be indexed for inflation after 2007. The option restores the AMT to its original purpose: an additional tax for very high-income taxpayers to make sure that most pay at least a minimal amount of tax. It is a simple, approximately revenue neutral over the ten-year budget window and highly progressive.
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Energy policy is an important subject these days, as Americans become increasingly aware of the costs of what President Bush has called "our addiction to oil" and the environmental costs of growing world consumption of fossil fuels. Although some foreign oil comes from friendly and politically stable countries, the world price of oil depends heavily on output in potentially hostile, war-torn, and politically unstable regions. Policy changes can help us eventually use less oil and emit less green house gases. This article discusses some tax policies, including energy taxes and energy tax incentives, that can be crucial components of an energy policy that addresses global warming and energy security concerns.
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In 1997 Congress enacted a number of tax benefits directed toward helping middle- and upper-middle income groups meet rising college costs. This shift in goals and strategies raises concerns about the fairness and effectiveness of the evolving federal approach to higher education. This policy brief analyzes who benefits from the major direct spending program, Pell grants, and the three tax subsidies that most closely resemble grants, the Hope and Lifetime Learning credits and the deduction for tuition and fees. In addition, the brief assesses the potential impacts of these direct spending and tax programs on the affordability of college and the college-going rates of potential students.
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