Below is the entire text of my op-ed. And I also encourage everyone reading to call their elected officials in Washington at (202) 224-3121 to encourage them to fix this problem immediately -- and to do so WITHOUT raising more taxes.
Reversing the sting of the AMT
By Mitch McConnell
Special to The Courier-Journal
Americans aren't surprised anymore when liberals in Washington call for a tax hike. But they would be surprised to learn that thanks to a mistake in the tax code called the Alternative Minimum Tax (AMT), Congressional liberals can sneakily raise taxes every year -- without even holding a vote.
And if Congress doesn't act soon to stop this, tens of millions of Americans, including about 174,000 families in Kentucky, will be hit with the AMT on April 15. The overwhelming majority that has never faced it before won't believe the unpleasant surprise.
You may have never heard of the AMT and think it doesn't affect you. That's because the AMT is a "stealth tax" that grows to attack more and more unsuspecting taxpayers every year, making it a massive, middle-class tax hike.
Congress created the AMT in 1969 to target a reported 155 wealthy Americans who, through legal deductions, managed to pay no income tax. At the time, the law was designed to affect only two out of every million taxpayers.
But that law failed to take inflation into account when deciding who was "wealthy enough" to have to pay the AMT. As a result, millions of middle-class Americans who the AMT was never intended to reach are now falling into the AMT tax trap.
Millions more will feel the AMT's sting if Congress fails to act soon. In the past, Congress has passed quick-fix laws to exempt many taxpayers who otherwise would be vulnerable to the AMT.
But with no law to do that on the books for 2007, the number of tax filers forced to pay this stealth tax will grow from 3.5 million in 2006 to over 25 million in 2007 -- to the tune of $65 billion shifting from American families to the government's coffers. And about 174,000 of those families will be right here in Kentucky.
Congress tried to right this wrong before. We passed, and I proudly supported, a permanent repeal of the AMT in 1999. Unfortunately, Bill Clinton blocked it with his veto pen. Since then, the number of taxpayers targeted by the AMT has only grown.
Now it's time for Congress to fix its mistakes and show Americans they understand the unfairness of the AMT stealth tax. Millions of people are paying more to the government than intended, all because of a poorly written law.
Some liberals in Washington are willing to repeal the AMT, but only if they get to raise your taxes elsewhere to make up for it. They don't view repealing the AMT as a way to protect taxpayers but as an excuse to raise more taxes. That's wrong.
We should repeal this middle-class tax hike entirely -- without raising taxes elsewhere. This is tax revenue the government never intended to collect; eliminating this stealth tax will protect millions of families from an unwelcome tax hike.
Whatever Congress does, it needs to act now. It's unfair to leave millions of taxpayers uncertain of what they will owe the tax collector on April 15.
And it's wrong to subject the American people to a sneaky, creeping tax hike that grows to encompass more taxpayers each year without a single vote in Congress.
We need tax relief now. The best way to start is with the permanent repeal of the outdated and poorly written law creating the stealth middle-class tax hike of the AMT.
Mitch McConnell, a Louisville Republican, is the U.S. Senate minority leader.
By Mitch McConnell
Special to The Courier-Journal
Americans aren't surprised anymore when liberals in Washington call for a tax hike. But they would be surprised to learn that thanks to a mistake in the tax code called the Alternative Minimum Tax (AMT), Congressional liberals can sneakily raise taxes every year -- without even holding a vote.
And if Congress doesn't act soon to stop this, tens of millions of Americans, including about 174,000 families in Kentucky, will be hit with the AMT on April 15. The overwhelming majority that has never faced it before won't believe the unpleasant surprise.
You may have never heard of the AMT and think it doesn't affect you. That's because the AMT is a "stealth tax" that grows to attack more and more unsuspecting taxpayers every year, making it a massive, middle-class tax hike.
Congress created the AMT in 1969 to target a reported 155 wealthy Americans who, through legal deductions, managed to pay no income tax. At the time, the law was designed to affect only two out of every million taxpayers.
But that law failed to take inflation into account when deciding who was "wealthy enough" to have to pay the AMT. As a result, millions of middle-class Americans who the AMT was never intended to reach are now falling into the AMT tax trap.
Millions more will feel the AMT's sting if Congress fails to act soon. In the past, Congress has passed quick-fix laws to exempt many taxpayers who otherwise would be vulnerable to the AMT.
But with no law to do that on the books for 2007, the number of tax filers forced to pay this stealth tax will grow from 3.5 million in 2006 to over 25 million in 2007 -- to the tune of $65 billion shifting from American families to the government's coffers. And about 174,000 of those families will be right here in Kentucky.
Congress tried to right this wrong before. We passed, and I proudly supported, a permanent repeal of the AMT in 1999. Unfortunately, Bill Clinton blocked it with his veto pen. Since then, the number of taxpayers targeted by the AMT has only grown.
Now it's time for Congress to fix its mistakes and show Americans they understand the unfairness of the AMT stealth tax. Millions of people are paying more to the government than intended, all because of a poorly written law.
Some liberals in Washington are willing to repeal the AMT, but only if they get to raise your taxes elsewhere to make up for it. They don't view repealing the AMT as a way to protect taxpayers but as an excuse to raise more taxes. That's wrong.
We should repeal this middle-class tax hike entirely -- without raising taxes elsewhere. This is tax revenue the government never intended to collect; eliminating this stealth tax will protect millions of families from an unwelcome tax hike.
Whatever Congress does, it needs to act now. It's unfair to leave millions of taxpayers uncertain of what they will owe the tax collector on April 15.
And it's wrong to subject the American people to a sneaky, creeping tax hike that grows to encompass more taxpayers each year without a single vote in Congress.
We need tax relief now. The best way to start is with the permanent repeal of the outdated and poorly written law creating the stealth middle-class tax hike of the AMT.
Mitch McConnell, a Louisville Republican, is the U.S. Senate minority leader.
