LOBBYING CONGRESS TO CHANGE THE ALTERNATIVE MINIMUM TAX
This research paper discusses how one would go about lobbying Congress to modify the alternative minimum tax (AMT). The basic approach would be to seek a dilution of the impact of the AMT particularly on the middle class (but not its elimination) by fashioning a change in the law which would appeal to key Congressional committee members in both parties, building grassroots support for it among key Congressional constituencies and enlisting the assistance of various interest groups. An important ancillary lobbying effort would be directed at the George Bush administration which might otherwise frustrate these efforts.
Need for Legislative Changes in the AMT
The AMT was first included in the Internal Revenue Code (IRC) in 1969 and has since been expanded by legislative amendments, especially under the Tax Reform Act of 1986. The AMT was designed to ensure that all taxpayers, especially wealthier ones, paid a minimum tax which was higher than would be due if all otherwise allowable exemptions, deductions and credits were given full effect in the computation of the federal income tax due from a taxpayer in any given calendar year. Each taxpayer computes his tax due in the normal way, then he or she must complete a special AMT schedule under which the taxpayer is given a specific AMT exemption against adjusted gross income which in 2001 was $33,750 for single taxpayers, then his or her exemptions, itemized deductions, and credits are reduced by a formula based on the size of his tax preference income, which is basically income from passive sources, such as investment profits. The net result is then multiplied by a flat rate of 26 percent which yields the actual tax due which may be substantially higher than it would be if no AMT existed.
The AMT in operation is bringing within its ambit more and more middle and upper middle class taxpayers for several reasons:
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