Charles Rangel and the AMT Monster

Grover Norquist reports:

The House Ways and Means Committee, chaired by Rep. Charles Rangel, held a hearing this month supposedly about simplifying the tax code for middle income families. What it really was about was a monster Mr. Rangel created, fed, defended, and now has turned on its master: the Alternative Minimum Tax. The AMT was created in 1969 in response to about 150 taxpayers not paying any income tax despite having very high incomes. This tax was changed around a bit throughout the 1970s, and found its modern form in 1982. That year, Mr. Rangel voted for an AMT rate of 20%, which still only affected several thousand taxpayers.

In 1986, he voted to raise the AMT rate to 21%, and several thousand more taxpayers were affected. Mr. Rangel did not vote for an increase in the top rate to 24% that followed. But he joined President Clinton in raising the top AMT rate all the way to 28% in 1993.

In 1999, Mr. Rangel voted against repealing the AMT beast and slaying it forever. Had that bill become law, the AMT would have been permanently repealed on December 31, 2007 — this year. Instead, Mr. Rangel is forced to deal with a monster of his own creation. The monster has gotten hungry. According to official estimates, failure to restrain the AMT will lead to 27 million taxpayers having to pay this tax. A tax that would be dead, gone and buried this year if not for President Clinton and Mr. Rangel.

The irony is almost poetic. The typical AMT taxpayer lives in a state like Mr. Rangel's New York, Nancy Pelosi's California, and Robert Menendez's New Jersey. They have a jumbo mortgage, sky-high state income taxes, a couple of kids, and a six-figure income. For the most part, these are the inner-suburb-and-urbanite, center-left voters who supported the AMT authors in the first place. It is unlikely that there is a thousand dollar contributor who is not paying the AMT.

The irony of the AMT before your eyes.The struggles of Blue America.