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AMT REPEAL - SO SIMPLE!

January 05, 2007

After many years of hand-wringing, the incoming and outgoing chairmen of the Senate Finance Committee have cut the gordian know and proposed a bill to just repeal the Alternative Minimum Tax. An as-yet unnumbered Senate bill introduced yesterday by Max Baucus and Charles Grassley would simply make the AMT $0 for individuals starting this year.

Nothing to it. Well, nothing except the need to find an additional $750 billion to $1.3 trillion dollars to replace the AMT revenue that the government would lose over the next 10 years.

But it's simple! Just ask Senator Grassley:

I hope the new congressional leaders don't fall into traps on AMT repeal. One is counting on the revenue that the AMT raises for more government spending. It's ridiculous to rely on revenue that was never supposed to be collected in the first place.

That's priceless. Every tax bill passing through Senator Grassley's Finance Committee since 1986 has counted on AMT revenues. It's nice to know that they were just joshing us, that the revenue they projected to justify their tax and spending policies "was never supposed to be collected in the first place." We should remember that next time they issue revenue projections for one of their tax bills.

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