In essence, the intention of the AMT is to set a minimum tax rate of about 27% on the highest earning tax payers so that they can not use loop holes or other tax reduction strategies to entirely avoid paying a substantial amount of income tax. The AMT affects taxpayers who have what are known as "tax preference items." These include (among others) long term capital gains, accelerated depreciation, percentage depletion, and certain tax-exempt income, which are all considered to have favorable tax treatment and could trigger the alternative minimum tax. Numerous tax credits can also trigger the AMT.

In a brief issued by the Congressional Budget Office (No. 4, April 15, 2004), the conclusion was clear:

• Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.

Nobody is really addressing this in politics, probably because if it was repealed in full there would be a huge loss in gov't money, and if they try to reform it, they get the standard "tax the successful" line. What are your thoughts?

Tax law in general needs to be overhauled. There should be a single bracket system, with the lowest income level (I recommend under $15,000) paying no tax whatsoever, and it should apply to all residents without exception. No loopholes, no deductions, no exemptions.

Weren't you talking about some reverse income tax, when the lowest bracket actually gets a tax cut to the extent they get money back? You told me about it a while back, I found it interesting because money in the economy is what boosts the economy on many fronts, and as the poor would spend the money a lot quicker than the rich, it would impute more money in faster.

One of the last things we want is for the poor to be spending more money. We really need the middle and lower income brackets to reduce their consumption in preference of a higher savings ratio.

We shouldn't be taxing the very lowest levels of income because we don't need the extra revenue from them (the income tax rate on the lowest is basically 0 now, but the system making it so needs to be simplified and made more explicit), and to help people at the very bottom levels support themselves. But giving them more money is not something I see reason to advocate at this moment.

Can making extortion, in any form, "legal" change the fact that it is wrong?

Yes.

Delta, I've got to buy you a drink for that one.