Band-Aid for AMT
When Congress passed the alternative minimum tax in 1969, the aim was to make sure 155 of the nation's wealthiest families would pay taxes instead of using deductions to avoid all federal income-tax liability. But the AMT hasn't been modified in those years to keep up with inflation. So last year more than 4 million taxpayers were subject to the AMT. This year, more than 20 million tax returns would have been affected.
Fortunately, Congress voted at the end of the year to shield many middle- and upper-middle-income taxpayers from the AMT -- for one year.
Unfortunately, Congress did not do the right thing by making a permanent fix in the AMT so taxpayers won't have to wonder next year if they are going to get socked with what amounts to an average $2,000 extra tax hit.
As it is, millions of taxpayers will have to wait for revised forms that take into account Congress' last-minute reprieve. Congress knows the AMT is weighted to include taxpayers who were never intended to be affected when the special tax provisions were enacted in 1969. After 30 years, you'd think they could figure out something permanent needs to be done.