TaxVox: Individual Taxes

Politicians and policy experts have paid a lot of attention to those taxpayers who would be exempt from the AMT if the levy is fixed or even temporarily patched. But there is another group that has been largely ignored—those who would still pay the tax but owe far less if the law is patched.

House Republican Study Committee Chairman Jeb Hensarling (R-Tex.) has an extraordinary idea: "The correction of tax mistakes should never be offset with tax increases." Hensarling's Law, which might also be called the Mulligan Act of 2007, came in response to a huge tax restructuring proposed on Oct. 25 by House Ways & Means Committee Chairman Charlie Rangel (D-N.Y.). The core of that plan would repeal the Alternative Minimum Tax and make up nearly $1 trillion in lost revenue over 10 years with an income tax surcharge and other tax hikes.

My colleagues and I had some heartburn when various news outlets referred to a surtax proposal made by Greg Leiserson and me as "the Tax Policy Center plan" to fix the AMT. The TPC has no tax plan or institutional positions of any kind. Highlighting that point, TPC's chief blogger, Howard Gleckman, showed that we don't speak with one voice when he complained that "I don't like ... the way AMT relief [in Chairman Rangel's tax reform plan] is funded" in his most recent post. That is, Howard's not keen on Greg's and my modest proposal, which Mr. Rangel adopted with small modifications.

Let’s start with the obvious: The tax plan rolled out today by House Ways & Means Committee Chairman Charlie Rangel (D-N.Y.) is not the “mother of all tax reforms,” the congressman’s claim notwithstanding.