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A tax hike for the rich?

Tax forms

TEXT OF STORY

BOB MOON: There's word today of a new plan to shift a higher tax burden that's threatening to hit millions of not-so-rich Americans. It's reportedly being considered by Congress as lawmakers try to figure out how to fix the Alternative Minimum Tax. That shadow system was supposed to guarantee that wealthy Americans couldn't avoid taxes altogether. But lately, it's been snaring middle income taxpayers. Nancy Marshall Genzer reports the solution could be a new tax on the rich.


NANCY MARSHALL GENZER: When the Alternative Minimum Tax, or AMT, was created in the 1960s, it wasn't indexed for inflation. So now some taxpayers making $50,000 to $70,000 might have to pay the tax.

Democrats want to protect them, but that would cost about $50 billion.

To find that money, the Wall Street Journal reports today that President Bush might agree to raise taxes on the rich.

University of Maryland political science professor Ron Walters says the President might compromise for the good of his party.

RON WALTERS: He's talking about helping out the party in the presidential elections and I think they're gonna look pretty good if they are able to say that they cut a deal that works with the Democrats in terms of lifting the AMT and its impact on the middle class.

Walters doesn't think the President would go for a new tax on the rich, but would instead allow some of his tax cuts to expire.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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