Watch that Passive Voice!

John Podhoretz offers the observation that "If Democrats offer a genuinely serious AMT reform that manages to cut taxes for tens of millions of middle-class people, the constituency for vetoing such a reform on the grounds that it would involve a tax-rate increase on those making more than $150,000 a year could fit comfortably into a Tokyo hotel room." Larry Kudlow responds that "Using $150K as a threshold means a school teacher and a cop. Not exactly rich people." J-Pod with a help from some readers notes in response that "Only 5 percent of American households report earnings higher than $157,000 a year" and follows up arguing that precise salaries for cops and teachers is irrelevant, the point is that "Five percent is a lot of households, true — 5 million or so. But to write as though a $150,000 salary in America puts you smack dab in the middle of the middle class, which was Larry's rhetorical purpose, just doesn't jibe with the way lives are lived in America."

Kudlow doesn't seem to have an answer to that, but Ramesh Ponnuru manages to weigh-in on Kudlow's side with a further observation:

The Clintonites thought that they were raising taxes only on the top 2 percent of Americans and cutting taxes for a lot of people (by expanding the earned income credit). They got branded as tax hikers anyway. (And it would have been a tough vote for them even if they hadn't raised the gas tax as part of the deal.)

Advice to always eschew the passive voice can be abused, but Ponnuru should consider the lack of agency in that story. Who branded the Clinton administration as "tax hikers" for their plan to raise taxes on a tiny minority of wealthy Americans while cutting taxes for a larger class of working poor people? Could that have been conservative politicians? And how well would that campaign have worked had the conservative politicians not been assisted by conservative pundits? These things don't just happen.

Comments

It would, I think, have been much more difficult to brand them as tax hikers to an interested public if the gas tax had not been part of the deal.

Posted by otto | January 8, 2007 5:29 PM

For those who, like me, are not deft at reading fuller charts, the articles on household and personal income distribution in Wikipedia are extremely helpful and informative. Try them to get a rapid sense of how much Americans actually earn.

Posted by tony grafton | January 8, 2007 5:30 PM

What's so bad about the AMT that it has to be fixed right away? Isn't the creeping effect of the AMT reintroducing some progressivity into the tax system, and undoing some of the Bush tax cuts?

Couldn't we just study the problem for a couple of years?

Posted by Hal Grossman | January 8, 2007 5:34 PM

Listen - Democrats will be labeled Tax Hikers no matter what we do. Look at Glenn McCoy (token conservative in NY Times Cartoons section, least funny, another example of wing-nut welfare) and what he produced today. Have Democrats already raised taxes? Has Pelosi tried to be anyone's proctologist? No and No. But we're labeled that.

Reagan and the second Bush have shown us definitively - Republicans will not cut spending when they cut taxes, and they will just run a deficit. In that world, Democrats will always stand for higher taxes - because we don't want solely to tax the future.

There is no avoiding this label. The only hope is that it will continue to lose power.

Posted by MDtoMN | January 8, 2007 5:46 PM

kudlow continues to demonstrate the long-term dangers of cocaine use, but i have to say, john podhoretz is starting to look like a voice of reason on the right.

i knew that i should never had tried cocaine!

Posted by howard | January 8, 2007 5:52 PM

Has a dumber statement ever been made than the "schoolteacher and a cop" line?

Posted by Gabriel R | January 8, 2007 5:56 PM

If Kudlow's rhetorical purpose was to put $150k per year smack dab into the middle of the middle class (which is, certainly, untrue), can we also point out that Podhoretz's rhetorical purpose of claiming that the constituency would "fit into a tokyo hotel room" was at least as dishonest a characterization of some 10 to 20 million people?

The thing about the $150k figure is that not a ton of people make it, no. But it's not a figure that's out of the realm of aspiration. Like, barring some kind of extremely unlikely and largely unearned good luck, I will never make $500k a year in today's dollars. I'm not on that career track, I don't have the drive to get onto one of the career tracks that could, and that's that. But if I marry someone who makes the same amount of money I do, our household with be $150k+. And I don't have a high prestige job or anything, though I live in an area (the SF Bay area) where wages are high.

Similarly, you take a couple who are making $65k each and are, say, 35, and sure, they're only making $130k total, but they say, "What about when we're 45? We could be making $150k." And a lot of times they actually won't, because one of them will stop working or scale back their job, or something financially bad will happen, or whatever, but the point is, it's not a figure that may as well be one million dollars. It's attainable, and not just for CEO's, doctors, and lawyers.

Then you add in the people who don't themselves make anything near that kind of money, but whose parents or siblings or close friends do, and "top 5%" stops looking like nearly the exclusive club that Podhoretz wants it to be.

Posted by Michael Sullivan | January 8, 2007 6:03 PM

Hold on. Is this $150,000 for single people or $150,000 for married-filing-jointly? It's gotta be for single people, right?

Posted by JP | January 8, 2007 6:17 PM

Matt's post says, "Only 5 percent of American households report earnings higher than $157,000 a year," (quoting Podhoretz), so I assume we're talking about, you know, households.

Posted by Michael Sullivan | January 8, 2007 6:20 PM

Is it ok to oppose gas taxes as too regressive even as I heart alternative energy and want to see more of it used? I'd love to see US familes use less petroleum, but pinching their over-stressed pocketbook is A) cruel and regressive and B) a massive political loser (B being largely a consequence of A).

Posted by NBarnes | January 8, 2007 6:31 PM

Re: It would, I think, have been much more difficult to brand them as tax hikers to an interested public if the gas tax had not been part of the deal.

Fortuantely for Bill Clinton the gas tax hike quickly turned invisible as gas prices as part of the general drop in energy prices during the 90s.

Posted by JonF | January 8, 2007 6:38 PM

If there is no AMT relief, then taxes will be increasing dramatically on the schoolteacher and cop (or at least the shcoolteacher-and-cop household, if they live in a state with state income taxes, or pay interest on a mortgage), while the truly rich have had huge tax cuts. That IS the Republican handling of our tax system, the status quo.

Posted by putnam | January 8, 2007 6:47 PM

Hate to defend JPod, but Michael when he said a Tokyo hotel room he was of course exagerating for affect. And on the merits he is correct and Kudlow is wrong. In a country the size of the US the 5% over $157K do metaphorically fit into a Tokyo hotel room.

As for your aspirational stuff. Yeah the sheer fantasy of most Americans about how wealthy they can become has pretty much been the key to the popularity of Republican tax policy for decades.

Posted by Eric | January 8, 2007 7:14 PM

It's true there are plenty of people who reasonably aspire to have a family income over $150k. But let's be clear, we're not talking about shooting them! We're talking about a small bump in the marginal tax rate, something that hardly destroys their incentive to push for that extra $10k or $20k of annual income.

We need to drop the illusion that we can fully fund the federal government solely by "taxing the rich" without anyone else feeling any pain whatsoever. Can't we, for one, talk about making "tough choices" that impact someone other than poor people and welfare recipients?

Posted by Steve | January 8, 2007 7:29 PM

Like Atrios has often said the AMT sucks because you spend 8-10 hours going over all your taxes then boom-you get hit with the AMT. Everything before that boom now becomes a waste and you get mad. If you want a better tax system, change the tax rates and allow the AMT do its original job of making sure the really rich pay at least some taxes.

Posted by Rob | January 8, 2007 7:36 PM

Also the tokyo hotel room was not in reference to those making 150,000 or more, but rather to those who would argue against an AMT reform that involved an increase for those making 150 plus.

Though Kudlow's point was idiotic, what I found even more idiotic was the second part of it, "Then again, if the Dems raise tax-rates on people earning $500 million, especially if specifically earmarked for Oprah, Barbara Streisand and Ben Affleck and other Malibu/Hollywood types"

He does realize that entertainers really don't make that much money when compared to people like CEOs and other traditional republican types? Such a tax raise would affect more republicans then democrats, but I guess when you have to suport the narrative that democrats are beholden to rich entertainers you can just ignore things like that.

Posted by nathaniel | January 8, 2007 7:40 PM

If my public school teacher daughter with a masters and 10+ years of experience were married to a local cop with the same years in, their household would probably bring in $80-90K per year.

Posted by Brian Boru | January 8, 2007 7:44 PM

"And how well would that campaign have worked had the conservative politicians not been assisted by conservative pundits?"

Actually it wasn't just the conservative pundits. They were assisted by the MSM. Sams, Cokies and Russerts of DC media kept chanting "he raised taxes!".

Clintons made a mistake. They forgot that most reporters covering the WH were in the top 1% tax bracket. So Clinton was raising the taxes of the media elite. Many of these reporters were making more money than the President of the USA.

Posted by DonB | January 8, 2007 7:55 PM

Of course he was exagerating for effect. And his exageration for effect was a rhetorical device that is just as deceptive as Kudlow's response. Five percent of the population? That's a hell of a big deal. When you're talking about the five percent of the population who are more than averagely politically aware, have disproportionate political power, and vote more often than average, the idea that you can shove them into a (metaphorical) hotel room and ignore them is, frankly, idiotic.

Five percent of the population is only an ignorable segment if the issue you're talking about is polarizing -- if the losses you take among the 5% are more than made up for by the groundswell of support you gain from the 95%. I don't see marginal changes in the AMT as something that's going to energize and excite anyone but "people who wonder if they're going to have to pay AMT next year."

Now, of course it's also true that that 5% isn't going to go irrevocably anti-Democrat if the Democrats make marginal changes in AMT, of course. Good thing, because if it were, that would probably literally sink the Democrats for the forseeable future. There seems to be a group of people in these comments who has it in their head that top 5% equals either "Cacklingly evil CEO's who are irrevocably Republican in all ways," or, in a small case, dedicated liberals who are happy to see some of their vast fortune go to the government because they accept progressive taxation as right and just.

The thing which Kudlow's example should point out to you (wrong as his point is overall) is that that's simply not true. Top 5% is not top 1% or top .1%. While, naturally, most people will never touch top 5%, most people who are top 5% are not the Paris Hilton set. They don't think of themselves as the elites of society whose vast wealth is a resource to be tapped or a reason to buy off government. They think of themselves as working families, more fortunate than most.

Whether that self-image is right or wrong is really pretty irrelevent. The point is, when they go bitching to their friends at parties over the Democratic tax raises, they aren't going to be exclusively talking to the jet-set, they'll be talking to lots of people who aren't top 5%. And the people listening to them aren't going to hear the ludicrousness of somebody like Donald Trump bitching about how bad he's got it, but of someone like them being squeezed out of money that the listener hopes they'll make in a few years.

That may not be an argument not to change the AMT. I'm not super informed about the subject. It may be that changing the AMT is a good idea regardless of how much people may or may not bitch about it.

Actually, while I'm on the subject, does anyone know of a good study or resource to get an idea of how movement between income bands works? Whenever I see something that deals with this -- you know, x% of people make $y -- it seems to me like that misses half the story. What I want to know is how many people who are under the poverty line this year will be above the poverty line next year, or five years from now, and similarly how many people above it will be below it next year or five years from now. And similarly for other income bands.

Posted by Michael Sullivan | January 8, 2007 8:02 PM

Michael you may not have had time to read the comment above but JPod said:
"If Democrats offer a genuinely serious AMT reform that manages to cut taxes for tens of millions of middle-class people, the constituency for vetoing such a reform on the grounds that it would involve a tax-rate increase on those making more than $150,000 a year could fit comfortably into a Tokyo hotel room."
He's not talking about 5% of the population, he's talking about the number of people who would want to kill a middle class tax break that effected that 5%.

Posted by Jacob | January 8, 2007 8:06 PM

Kudlow's comments reminded me of John Roberts' memo last week, in which he argued that the salaries of federal judges are so low that soon only independently wealthy people will be able to make the "sacrifice" of taking such a job. Now federal judges make 165K (district) and 175K (appellate). The SCOTUS justices make a little more, but I assume even Roberts wouldn't argue that somebody will turn down a SCOTUS appointment because of the poor pay.

Note that an individual income of 165K is in about the 97th percentile (only 5.7% of *individuals,* not households, made 100,000 or more in 2005). Furthermore federal judges actually make much more in real terms because they can't be laid off or fired, they have incredible pension benefits (they can retire at full pay after 15 years on the bench), and they get oodles of "psychic income" (power, prestige etc.)

The point is that for guys like Kudlow and Roberts, that is, for the rich in America today, 165K a year sounds like peanuts because to them it *is* peanuts. It reminds me of a partner at my old law firm who told me, a lowly young associate, that he just couldn't imagine how people managed to live on 200K a year. This was nearly 20 years ago! And it's gotten a lot worse since then.

Posted by Paul Campos | January 8, 2007 8:10 PM

150,000 dollars is a very exclusive club. Most Americans don't know a couple that makes that much money. Most American couples count themselves lucky if they make half that. 150,000 dollars a year is not middle class. If you think it is you are severely out of touch with mainstream America. Most couples that make that much know each other. They are certainly not likely to be at the top echelon of society, but they are not middle class. Don't make the mistake of assuming that because you aren't wealthy, you must be middle class.

Posted by Soullite | January 8, 2007 8:20 PM

it's worth noting that our $150K earner basically is making 4x the median household, so the gap from 50th percentile to 95th percentile is 4x.

from 95th percentile to 99th percentile all by itself (i don't have time to look the numbers up) is something like 2.5 - 3x.

from 95th percentile to 99.9th percentile is roughly 6x.

not only do most household not earn anywhere close to $150K, but even more, most people don't realize just how tiny a number of people is the high-earning bracket.

similarly (and to pick up a point from the other day), Ezra noted that the average WSJ reader is 55 years old and has a household net worth of $2.1M. The median household net worth of those headed by 55-64 is about $120K (as of 2000, probably up a little since then), so the wsj reader (a well-of cohort) is worth 18x the median household of the appropriate age.

Bill and Melinda Gates (to take an extreme case, admittedly, but just to make the point) are worth something like 1500x the average WSJ reader....

Wealth and high income and both intensely concentrated in america.

Posted by howard | January 8, 2007 8:33 PM

"150,000 dollars is a very exclusive club. Most Americans don't know a couple that makes that much money. Most American couples count themselves lucky if they make half that. 150,000 dollars a year is not middle class. If you think it is you are severely out of touch with mainstream America. Most couples that make that much know each other. They are certainly not likely to be at the top echelon of society, but they are not middle class. Don't make the mistake of assuming that because you aren't wealthy, you must be middle class."

Hence the wonderfully flexible term "upper middle class," which is regularly used to describe anybody not as rich as Paris Hilton or Donald Trump.

A verbal tick of the American media is that they find it very difficult to use the phrase "upper class." Thus "upper middle class" ends up describing people with incomes of 90K a year (which in fact is in the top quintile of household income), and 900K a year.

Posted by Paul Campos | January 8, 2007 8:34 PM

Michael, I'm nowhere near the AMT so this is a serious question: What percentage of the 5% would get their tax hikes back through AMT reform? To choose a probably simplistic example, suppose we make the top tax bracket start at $150K and raise the rate on that bracket to 50% (from 31/36/39.6% for married filing jointly). If my household makes $160K, this rate increase costs me less than $1900, since only $10K of my income is taxed at the new 50% rate. Would we save at least $1900 through not having to pay AMT anymore?

Also, where did the $150K figure come from? Was it just something that Kudlow or Podhoretz chose out of the air, or is it related to Democratic policy proposals?

Posted by Matt Weiner | January 8, 2007 9:01 PM

Matt -- no idea. I don't make anywhere near that amount of money, and I've never been in danger of paying AMT, so I've never investigated closely.

In my corner of the world -- high tech, SF Bay Area, my experience is that what happens to people I know is they cash in stock options, get a huge bump to income one year, get a house and a mortgage, and thus get big tax-breaks, and pay AMT. Honestly, I can't think of a time when I've heard of someone paying AMT when a house didn't figure into the deal. Houses are, of course, ultra-expensive in this neck of the woods, so you can write off huge amounts on the mortgage.

Posted by Michael Sullivan | January 8, 2007 9:09 PM

One thing to consider is differences in location. While some households bringing in, say 150k-250k could be considered very well off, I would bet that a large majority of those in that range, are working fairly normal middle class professional jobs in high COL areas, like LA, SF, NYC, etc. A schoolteacher and a cop might well make 150k in NYC or SF. Of course, we wouldn't consider them terribly wealthy, since they probably have to put most of it into their housing.

I agree that it's disingenuous to say "That's a schoolteacher and a cop" as if that's *typical*, but I would bet that the typical 150k/yr household doesn't look rich, they just live somewhere that's very expensive. That said, a tax reform that involves increases on 150k and above, probably won't hit 150k households all that hard. It'll hit 350k households much harder, and very few of them look like the people next door, unless you are one of them.

[a different michael sullivan, hence the "e"]

Posted by Michael E Sullivan | January 8, 2007 9:15 PM

Matt, $157K is the 95th percentile of household income. $155K is the beginning of the 33% tax bracket. The top tax bracket (35%) starts at $336K. Although the 2001 tax cut lowered rates across the board, I would assume that the Democrats only intend to allow the upper 2 brackets to expire. (Especially, since below $155K, you get more and more "teacher and a cop" households in your net.)

Posted by Chris Conway | January 8, 2007 9:26 PM

Maybe tax rates should be based on local cost of living?

This would end the huge subsidy people living in places like New York and California provide to those living in low cost of living states.

Posted by alphie | January 8, 2007 9:40 PM

Ponnuru should know better than to use the passive voice when he brags.

Posted by Tyrone Slothrop | January 8, 2007 10:07 PM

Matt Weiner - you don't provide enough information to answer your question. The AMT rate is 26%/28%, but it applies to a different amount. The regular tax applies to your AGI. But to get the amount on which the AMT rate applies, you need to add back to your AGI things like your deduction for state taxes, per child exemption, deduction for home mortgage interest, personal exemptions, etc. If,currently you are paying regular tax at, say 35%, on your AGI of $160,000 (tax = $56,000), you might potentially pay AMT of 28% on, say, $210,000 (tax = $58,800) after adding back all those things. In that case, the AMT is $2,800 ($58,800 - $56,000). You have to tell me how much in deductions one adds back, what the AMT rate is, etc. to answer your question.

Posted by Al | January 8, 2007 11:20 PM

Al, thanks. What I'm wondering is something like a percentage question -- for what percentage of people would eliminating AMT outweigh the tax hike? But those numbers clearly won't be easy to come by. Of course if 20% of households get AMT'd by 2010, then it's certain that more households will gain than lose from trading AMT repeal for higher taxes on the top 5%.

Also, correct me if I'm wrong, but the 5% figure is for gross income or something rather than AGI, right? So raising taxes on the top two brackets would affect considerably less than 5% of households, since AGI is lower than income reported to the Census.

Posted by Matt Weiner | January 8, 2007 11:37 PM

Alphie,

Re: regionally-COL-adjusted tax rates, there may be a Constitutional problem there:

Article 1, Section 8, Clause 1 of the Constitution:

"Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be UNIFORM throughout the United States;"

Emphasis mine.

I suppose the case can be made that the reference to uniformity excludes Taxes while including the other three, but I don't know if that would fly.

Posted by Lewis Carroll | January 9, 2007 12:07 AM

You have to age-adjust all this stuff. Households with prime earners in their teens and 20s don't earn very much, those in their 30s are still working their way up. But almost 30% of households aged 45-54 (prime earning years) earn $100,000 and up (the topcode on the table I glanced at). My guess is well over 10% would earn more than $150K. It is indeed the upper middle class.

The correct move for the Democrats is to raise taxes on the top income bracket, which as someone above mentioned starts at over $300 K per year. That is getting closer to a real wealthy group. Plus, bring back the estate tax with a very high exclusion, so the very few estates over, say $10 or $20 million get socked. There is a ton of untaxed money at the truly high end, let's not mess with the upper middle class.

Posted by MQ | January 9, 2007 12:19 AM

"A schoolteacher and a cop might well make 150k in NYC or SF."

Not in NYC. Starting salary for NYC cops is in the mid-$20,000s. I believe municipal employees in the Bay Area generally earn more than their East Coast counterparts, however.

Posted by James Gary | January 9, 2007 12:26 AM

This is a little off topic, but I've noticed that Kudlow seems to make a lot of dumb mistakes or plainly idiotic statements concerning economics. That's not unusual for maby people, but he's someone whose career, according to his Wikipedia page, should have required him to have some idea of what he's talking about. Is it possible to be a clown and have a job at Bear, Stearns & Company and the OMB? Or does he have a greater knowledge of this area than I've been led to believe? Something doesn't seem to add up here.

Posted by Brian | January 9, 2007 12:45 AM

Who cares about a "tax hike" label? Taxes are a good thing when you can see the results. Its not tax and spend thats the problem. Everyone likes effective government spending. What burns people up is "tax and waste", or "tax and steal", which is basically what the republicans have been doing for the last 6 years.

Believe me people making less than 150K a year are more concerned about getting through the year then their tax issues.

The anti-tax lobbies "populous base" is the same group of republican rent-a-thugs that the "conservatives" always bring out. It speaks volumes that John Bolton was responsible for squelching the investigation in to Renquist's drug problem for Reagan at AG, and then "miraculously" appears to count votes in Florida in 2000, and then works his way through neo-conish appointments for 5 years, fucking up everything he touches. There's a guy who is making more than 150k a year, who doesn't want to pay taxes, but wants to live off the public tax base. And we could go on and on and on looking at just about any Bush/Cheney federal appointee. These guys are "pundits" or "operatives" they're crooks.

Posted by patience | January 9, 2007 1:00 AM

I'm the first Michael Sullivan on this thread, not the later Michael E Sullivan. Common names, what can you do.

James Gary says: "I believe municipal employees in the Bay Area generally earn more than their East Coast counterparts, however."

My friend was recently looking into becoming an Oakland policewoman. Starting salary was ~65k per year, though I think that's high even by this area's standards. I imagine that's because people don't consider Oakland a good city in which to be a cop.

Posted by Michael Sullivan | January 9, 2007 1:08 AM

Common names, what can you do.

Last I checked, the name "Michael the Proletarian Phoenix" was open.

Posted by Neil the Ethical Werewolf | January 9, 2007 1:21 AM

Wow. I think my wife and I will start looking into marrying either a schoolteacher or a cop. You know, whoever's cuter.

Posted by Thers | January 9, 2007 1:37 AM

The effects of the AMT are very disproportional regionally. I live in the Boston area and I know a number of people who bumped up against the AMT, who would not be considered rich in any sense based on life style, though the nominal amount of money they make would appear to be a lot of money to someone from Nebraska, for example.
The current non-AMT income tax is implicitly adjusting for COL for anyone who itemizes. For those who do not itemize the effective tax burden is much higher in say Boston than Nebraska, as living on $40,000 is much harder in Boston, believe me. Now the AMT, is spreading that regional inequity up the ladder.

A truly progressive tax system is based on one's ability to pay, not the nominal amount of money they earn.

And by the way the AMT is not indexed to inflation, so without reform, that 5% will grow by a couple percent each year.

Posted by AJ | January 9, 2007 7:51 AM

Conservative pundits were branded as glue-sniffing, second-story men for their part in abetting the destruction of the country under Bush.

Posted by Jeffrey Davis | January 9, 2007 9:11 AM

I do take the Original Michael Sullivan's point about single-year spikes in places like the Bay Area. But that's an argument against stock options as an income source, not against tax policy that's directed towards what Americans actually earn, as opposed to what they dream of earning.

Actually, while I'm on the subject, does anyone know of a good study or resource to get an idea of how movement between income bands works?

I'd be interested in that as well, not least because there are obviously shifts related to the points at which income and personal situation direct you towards different strategies of financial planning and tax preparation. At some point, people start looking for the big deductions through simple means; at another point, they start getting creative; at another, they set up offshore accounts and holding companies. Let's call them the TurboTax, HR Block, accountant and tax avoidance specialist bands.

Posted by pseudonymous in nc | January 9, 2007 9:34 AM

And by the way the AMT is not indexed to inflation, so without reform, that 5% will grow by a couple percent each year.

I believe the 5% is the people in the top two brackets, not the people paying AMT; and since Reagan the brackets are indexed (I believe, again), so that 5% isn't guaranteed below. According to J-Pod in MY's "help from some readers" link (I guess we should corroborate this) 20% of taxpayers are expected to pay AMT by 2010, and that's the number that will be growing. As I said in a previous comment, that just makes the trade of AMT reform for tax hikes on the top brackets even better.

Incidentally, isn't another reason for disproprtionate regional AMT the deductibility of state taxes? So the AMT penalizes high-tax high-service states. Part of the reason the GOP seems indifferent (that article says AMT could affect 30 million taxpayers by 2010 which is 10% of the current population but I guess a higher proportion of taxpayers).

Posted by Matt Weiner | January 9, 2007 10:27 AM

Matt, One reason the GOP may be indifferent is that the AMT is a flat tax---as it captures more and more "middle income" earners, it (ahem) progressively flattens the tax structure. The main problem with the AMT is probably not so much the number of people it affects or its precise rate, as the fact that you get hit with it only after you've gone through all the complexity of calculating your regular tax bill. I.e., it's sort of the anti-postcard-sized tax return.

I think simplifying the tax code would be a great triangulating issue for the Dems. But I wouldn't want them to take it on before they demonstrate they're savvy enough not to get outfoxed by Bush & Co.

Posted by Chris Conway | January 9, 2007 11:49 AM