Back to taxing the rich
The top of a Form 1040 individual income tax return for 2005.
TEXT OF STORY
LISA NAPOLI: House Democrats will be working again this week to come to terms on an alternative to the much-reviled Alternative Minimum Tax. Lawmakers are said to be closing in on an agreement to eliminate the AMT for all but the richest taxpayers. Income tax for the wealthiest would go up to help pay for the fix. Marketplace's Bob Moon has more
BOB MOON: Democrats now say they hope to have a bill on the House floor within two months that would sharply limit the reach of the AMT.
Time is of the essence. The latest AMT patch expired with the tax returns Americans just filed, and that means 23 million more taxpayers face stiff AMT surcharges next filing season.
The AMT has been triggered mostly for taxpayers in Democratic strongholds with high state and local taxes. But Len Burman, who heads the Tax Policy Center, a D.C. research group, says the geography and, importantly, the politics of the AMT now threaten Republican areas too.
LEN BURMAN: To the extent that the AMT bites, it's going to be hitting the ones who are known to be very sensitive to policy decisions in determining which party they go with.
With so many new households threatened by the AMT, Burman says Red State Republicans need to start worrying.
BURMAN: Instead of calling it a Blue State tax, you ought to call it a soccer mom tax or a swing voter tax.
Even so, Republicans have insisted they'll fight any AMT fix that's financed by tax increases on the rich.
I'm Bob Moon for Marketplace.