Republicans and Democrats. House members and senators. White House advisers and Main Street tax accountants. They all agree that the Alternative Minimum Tax, once an annoyance to only the super rich, has become a middle-class-devouring dragon that needs to be slain.
This week, as Tax Day focused attention on the issue, politicians near and far were eager to express solidarity with the millions of taxpayers who have been blind-sided by the AMT in recent years.
So why hasn't anybody done the deed? There are only about 1 trillion reasons. That's how many dollars the federal government will be short over the next 10 years if it really does end, or even delay, the reach of the AMT into the pockets of more and more middle-class families.
Created in 1969 as a way to make sure the super rich didn't exempt and deduct their way out of paying any taxes at all, the AMT was not indexed for inflation. So it has been reaching down the demographic ever more deeply, into upper-middle class families with annual incomes as low as $75,000. If nothing is done, significantly higher tax bills will hit some 30 million households by 2010, compared to only 3.8 million in 2006.
An estimated 913,000 of those new AMT families will live in upstate New York. It hits particularly hard in New York State, where households subject to the AMT lose their ability to deduct the relatively high state taxes they pay.
So even though no one can be found to defend the monster that the AMT has become, and everyone wants credit for being the one who hates it the most, none of the various proposals to deal with the problem has yet gained critical mass. The reason is that a true solution would have to include offsetting revenue increases, spending cuts, increased national debt, or some combination of the above, none of which would make its authors very popular.
Rep. Thomas M. Reynolds, a Clarence Republican, deserves credit for being among the few to raise the alarm early and often. But so far all he has been able to manage is to keep bonking the alligators on the head -- by successfully proposing one-year delays in the AMT's reach -- and hope that someone will come along to drain the swamp.
Proposals to do just that have been suggested by others in the New York delegation, including Sen. Charles E. Schumer and Rep. Charles Rangel, both Democrats. Those proposals, properly, include other tax reforms intended to aim the federal vacuum cleaner away from the struggling middle class and back to the pockets of the rich, the proper target of the AMT and the group that has benefited the most from the Bush-era tax cuts. That's logical enough, but not yet popular enough in a capital city that still fears offending the rich and their lobbyists.
The AMT needs eliminating, or permanent reform. And it won't happen unless politicians stop posturing and work out a real deal, properly one that hearkens back to the original point of the AMT, which is to make sure that the people who benefit the most from living in the United States pay the most to maintain it.