(WASHINGTON) House Ways and Means Select Revenue Measures Subcommittee Chairman Richard E. Neal released non-partisan data today that expalins how the the Alternative Minimum Tax (AMT) disproportionally hurts working families and benefits the super wealthy.
The non-partisan Congressional Research Service (CRS) has extensively studied the impact of the AMT and deemed the reduction or elimination of promised cuts in the regular income tax by the AMT as the “take back" effect. New data from the non-partisan Joint Committee on Taxation (JCT) for the first time shows the actual dollar impact by income group of this “take back" effect of the AMT. For tax year 2008, families earning between $100,000 and 200,000 will lose 47% of the promised tax cuts enacted in 2001 and 2003, including the rate reductions and marriage penalty relief, among other cuts.
Said Mr. Neal, “While some Members have trumpeted the tax relief to middle-class families, these new numbers show that the “check is still in the mail" for most working families. This chart makes clear that families earning between $75,000-200,000 are footing the bill for the 2001 and 2003 tax cuts for the super wealthy."
JCT examined the impact of repealing the 2001 and 2003 enacted tax cuts with and without the impact of AMT. Results showed:
* For taxpayers earning over $1 million, AMT only “takes back" 3% of these cuts.
* For families earning between $75,000 and 100,000, the AMT takes back 20% of promised cuts, almost seven times as much take-back.
* For families earning between $100,000 and 200,000, AMT takes back 47% of the promised cuts.
* For families earning between $200,000 and $500,000, AMT takes back 63% of the tax cuts.
Said Mr. Neal, "Indeed, those families who thought they were doing pretty well, at $200,000 to 500,000 in earnings, really take it on the chin losing 63% of the promised Bush tax breaks. No wonder suburban soccer moms are not seeing the impact of the ballyhooed Bush tax relief in their pocketbooks while the super-rich are taking 97% of their $65 billion in tax cuts to the bank."
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