After a bruising election with plenty of harsh rhetoric thrown around on both sides, the Democrats and Republicans actually made nice yesterday, on an issue that's vitally important to a lot of people: the alternative minimum tax. Leaders of both parties sent a letter to the IRS saying they wanted to tackle a flaw in the AMT, which has a way of sneaking up on middle-class taxpayers.
"We will work to craft the AMT provision so that, in the aggregate, not one additional taxpayer faces higher taxes in 2010 due to the onerous AMT," the letter says. It's signed by the chief Dem and GOP member of each of the tax-writing committees in the House and Senate. The AMT's original limits weren't indexed to inflation when the law was introduced in 1969, so without fixing, they tend to be fairly low. As it stands, married couples making as little as $45,700 would be subject to the AMT in 2010. In 2009, married couples making at least $70,950 were subject to the AMT.
Congress has done this before, raising the limit to protect taxpayers from the ravages of inflation. It's been a pretty regular thing, to index the AMT for inflation each year. Still, it's nice to see the two parties working together on something that could, if left unchecked, become a big problem.
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