December 14, 2006 12:56 PM | | Bookmark and Share

Keeping the individual Alternative Minimum Tax from affecting tens of millions of innocent taxpayers is a problem that has bedeviled Congress ever since it passed President Bush’s big cuts in the regular income tax back in 2001 without simultaneously adjusting the AMT.

Over the past several years, Congress has repeatedly enacted temporary increases in the AMT exemption to protect most otherwise-affected families from having to deal with the AMT. But the cost of continuing these temporary patches has become prohibitive — exceeding $250 billion in lost revenues over the next four years.

Yet there is a straightforward way to pay for extending the temporary AMT relief through the end of this decade without busting the budget. This solution has the added advantage of returning the AMT to its original purpose: to assure that people with very high incomes pay a reasonable amount in federal income taxes.

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