MINIMUM-TAX GLITCH NEEDS A FIX

At least 1 million taxpayers could face higher income-tax bills next year unless Congress and President Clinton fix a tax-code glitch that mainly penalizes middle-class Americans. Without a deal to resolve the glitch, millions of Americans will have to fill out complicated, time-consuming Internal Revenue Service forms just to determine whether they should pay regular income taxes or the alternative minimum tax, known as AMT, which increases their tax burden.

The AMT was created in 1969 to ensure that the wealthy didn't escape income taxes through legal loopholes. A combination of rising personal incomes and a proliferation of tax credits have forced more people to pay the AMT, which taxes income at a 26 percent rate. Millions of middle-class people pay regular taxes at the 15 percent rate, which applies to married couples with taxable incomes below $43,000.

The Treasury Department estimates that 1 million middle-class taxpayers could get stuck with a larger AMT tax bill unless current tax law gets changed. "Many families won't be able to deduct the full value of their educational and child-tax credits without reaching the AMT limits," said Sen. Richard Lugar, R-Ind.

The Republican tax cut bill vetoed by President Clinton last week includes phased-out elimination of the AMT. The president has proposed a new two-year exemption from the AMT, and there appears to be broad bipartisan support for that.

Somehow, Congress and the administration need to find a way to work through this foul-up. Tax compliance is sufficiently difficult without such complexities.