http://www.bloomberg.com/apps/news?pid=10000103&sid=aWd.6xDsfmGg&refer=usPresident George W. Bush's tax advisory panel will recommend repealing the Alternative Minimum Tax, a levy originally intended for the wealthiest Americans that is increasingly affecting middle-income families, said former Senator Connie Mack of Florida, the panel's chairman.
"The consensus is that we will repeal the AMT," Mack told reporters during a meeting of the panel in Washington.
The AMT, created by Congress to ensure that wealthy people don't avoid taxes by using excessive deductions, is projected to affect 30 million Americans with incomes as low $50,000 by 2010. It is projected to raise $100 billion in revenue for the government over the next decade. Mack said the tax panel would have to take into account this shortfall as it crafts other recommendations for changes to the tax code.
Two panel members, Vice Chairman John Breaux, a former Louisiana senator, and Elizabeth Garrett, said they were concerned that repealing the minimum tax would allow some wealthy Americans to avoid all taxes. Mack said the panel would address these concerns, though he offered no specifics.
The nine-member panel is holding its first public deliberations today and will make recommendations to Bush by Sept. 30.
Bush, who signed into law five tax cuts totaling more than $1.85 trillion during his first term, made overhauling the tax code a priority of his second term in his Feb. 2 State of the Union address. He said the 3,000-page tax code is too complex and discourages savings.
The Alternative Minimum Tax was originally designed to force millionaires to pay some liability no matter how many deductions they had. Because the tax never was indexed for inflation when it was created in 1969, rising incomes are pushing more middle- income workers into the system, which denies most deductions and forces those affected to pay a higher tax.
