The AMT is a 26% tax on all income above an exemption at $58,000 a year for a married couple, with a 28% bracket on income above $175,000. It's not Frankenstein. If you're affected by it, it's because you've received a large number of unfair exemptions on your regular income tax - for example, the mortgage credit, a subsidy to the suburban upper middle class that costs the federal government $76 billion a year.

There's an argument to be made for indexing it to inflation, in ten years, when $58,000 a year is a reasonable amount for a deduction on a married couple. Until then, complaints about it amount to standard whines by the first world's most undertaxed middle class.

In fact, if the exemptions passed in the 2006 were not extended, the AMT would affect individuals making as little as $33,750 a year. Not exactly wealthy people.

It's true that the mortgage credit is one deduction that's not accounted for in the AMT, but the child tax credit (one of very few supports this country offers to families raising the next generation) and the deduction for state and local taxes are others. I would argue that these two deductions are fair.

No, not exactly wealthy, but still, a 26% tax on all income with a $33,750 deduction is perfectly normal. In Denmark they have a perfectly strong middle class, with an income tax that starts at 42% with a deduction of about $5,000, and a 25% sales tax.

The child tax credit is just as unfair as the mortgage credit. The families who need cash benefits the most are low-income families, but a tax credit in a progressive tax system will always benefit the rich the most. It'll help struggling families more and cost less to instead beef up means-tested programs like TANF, or institute such constant benefit programs as Hillary Clinton's proposed $5,000 cash grant.

The deduction for state and local taxes I'm more conflicted about, because in principle it's supposed to help states institute their own social programs. In practice, though, the fact that no state has yet found the formula to institute universal health care while controlling cost, even though about 20 other developed countries have, speaks volume to how this works. I'd be a lot happier if the federal government instead said that if a state can institute a comprehensive program that provides at least as good a coverage as a corresponding federal program, then its residents will be exempt from the portion of their tax bills that goes to support that program. So if New York starts a health care program that covers all residents, or even all residents who're eligible for Medicare and Medicaid, then New Yorkers will no longer have to pay the portion of federal taxes that goes to health insurance - I think it works out to 22% of income tax plus FICA, but don't quote me on that.

It's not the case that only low-income families need benefits for children and other services: the middle-class squeeze is a real and growing source of economic insecurity and instability for a growing number of Americans.

Higher taxes on the middle class, per se, are not a problem as long as they pay for high-quality public services that the middle class also benefits from (as in your example, Denmark) and as long as the wealthiest Americans also pay their fair share. This is not the case in the U.S. today. The legislation discussed in this blog post is a step toward greater tax fairness because it reapportions the tax burden between the middle class and the wealthiest Americans.

But the middle-class squeeze has very little to do with high taxes. The USA's middle class has a higher income than most other developed countries', including many without any such squeeze. The way I see it, the squeeze is mostly about job insecurity and rising costs of health and education; those you solve by hiking taxes on the middle class and using them to pay for social insurance programs. You can't really do this just out of taxing the rich, because there isn't enough income in very high tax brackets. Nor do those other countries do it by taxing only the rich: in France the top income tax rate is lower than in most US states, while that top rate begins at a far lower income level and sales taxes are far higher. If you want a healthier middle class, go for universal health care, higher unemployment benefits, and lower college tuition, and forget about cutting anyone's taxes.

Wow. Who let the Bolshevik in?

I obviously do not come to this blog expecting rational thought or economic sense, but these comments are really on the deep end of the left wing here.

Lest we forget that oppressive taxation was a primary cause of the American revolution, let us realize that what is being espoused here is not only unconstitutional and morally decrepit, but economically absurd. Universal health care (aka socialist theft and seizure of a market) would violate constitutional privacy protections and result in an even greater entitlement burden. The quality of care would most likely go down and waiting lists will become common place. You people speak about markets as if they're supposed to serve a specific interest of a collective people. That's economic hogwash: markets are for the exchange of goods and services, nothing more. If you can afford a good or service, you may purchase it. End of story.

There is no "right" to health care because to acquire health care one must engage in the exchange of goods (medicines) and services (surgery, check-ups, etc) with other individuals; thus, without this interaction, one would not have health care. Or, in your socialist, centralized, behemoth state, it would be a state-run program funded by theft (increased taxation) and enforced by coercion of government. If you want to call it an entitlement, so be it, but it's still unconstitutional and morally decrepit. I may need to remind you folks: this is the Republic of the United States of America. We are not a socialist democracy, and to turn the state into what you all want it to be, you would need to scrap our current Constitution.

High taxation is a great way to produce a stagnant economy; even Keynes, as much of a statist as he was, recognized this, hence his preference for deficit spending to stimulate (false) growth (the creation of fake demand) over balanced budgets and tax increases commensurate with spending. Tax increases, as even Keynes realized, lead to decreased investment and consumption. Coupled with our monetary system which breeds inflation, tax increases serve only to make life harder for those people on fixed incomes that are not indexed for inflation, such as the pensioners and poor folks living on the minimum wage, which you all seem to adore. (Again, you people have no economic credentials whatsoever, and it is painfully obvious.)

The fact that you cite France is laughable at best: they have just elected a leader who has promised to trim their stagnating socialist state. While he is far from perfect, his election was a rebuttal of the failures of socialism. It's a particularly ironic example for someone like you to give because of the riots that take place there on a daily basis: this is the result of an oppressive, authoritarian socialist state with burgeoning bureaucracies that serve only to preserve stagnation and keep competition out. Companies have no freedom to hire and fire in France, and as a result, the youth find it incredibly difficult to find jobs. And yet you all pretend to care about these people. Oh, but I suppose you'll come back with some convenient race-based excuse for these riots, enabling the mitigation of the truth as usual.

The key to economic prosperity for all is a free market economy. Perhaps, instead of reading this drivel, you would do well to seek out some of the real policy institutes (the ones with, you know, economists *gasp*) and do some reading (you know, other than Marx).

If all else fails, and you're still a socialist, perhaps moving to Venezuela would be a viable solution. Like the quote goes: "If you're not a socialist by 20, you have no heart; if you're still one by 40, you have no brain." It would appear that some of us advance sooner than others, and that, for a minority (of which you are surely a part) of people, advancement is simply beyond reach.

Oh, and do excuse my straw men; in return, I promise I'll forgive your lack of economic intelligence.

On a final note, it would be nice to visit this blog one day and find some appreciation for the Constitution, free markets, and other American values. The constant drum roll for socialism is pathetic and boring.

I'm sorry, but I don't take people who call France an authoritarian state seriously. Go play with the anarchists who swear to me that the US is a fascist dictatorship.

France isn't authoritarian? What else would you call a state that forces an arbitrary number of hours in a work week on the private sector? And that forces people to buy into their state health care monopoly? Perhaps socialism isn't authoritarian enough for you until it turns into blatant tyranny. What would it take for a state to be 'authoritarian' enough for you? Secret police? Concentration camps? Try reading a dictionary definition every now and then. Oh, and read some Locke while you're at it as well. I know they're always pushing "contemporary" political theorists nowadays, but don't you think you've worn out your Chavez book by now?

As for me being an Anarchist, you clearly lack reading comprehension as well as economic intellect: if you bothered to read even a few sentences into my post, you would have noticed my intense support for this nation's founding document. I'd hardly have considered Barry Goldwater an anarchist, yet he opposed you socialists and Bolsheviks with great fervor. Wake up: you're on the far left wing; nobody takes you people seriously; your opposition has many labels because it is broad and irrespective of any one political ideology. Heck, even Hillary Clinton thinks you folks are off the deep end. Have fun at your Bellavu... err.. Kos conferences, though!

I find it particularly telling that you ignore economics yet again with your latest post. Clearly you plead no contest to the charge of economic ignorance.

I really do hope you succeed in academia; I'd hate for you to venture out into the real world and realize that socialists are relegated to the fringes of society.

You're doing a great job promoting class warfare, which is just what the professional politicians want you to do. They'd much rather pit you against your fellow Americans than have you focus on how they steal and waste everyone's money.

Let's look at the AMT. To begin with, those 155 or so Americans who paid no income tax back in the late 60's were simply following the rules. Shouldn't the rules, the law, be applied to all people equally? Why should they be singled out and penalized for being successful and clever enough to avoid paying taxes by playing the game correctly? Could it be because you're jealous of their success? By what twisted excuse for logic do you imagine that you are entitled to share in the earnings of any other person?

Here's a lesson for those of you who have a very steep learning curve when it comes to the politics of jealousy. Back in the day, when the income tax was first introduced, it was sold as something which would apply only to the very richest Americans, probably 1% or less of the population. Lo and behold, today it impacts all of us? Wonder how that happened? Now look at the AMT, which was introduced and touted as something that would apply to a mere 155 of us out of a nation of many million wage earners. Forty years later, it's come to impact many, many, many more people. Get the picture yet? Haven't you figured out how this works? T

It's amazing how easily you've fallen victim to the politics of class warfare. To begin with, how is it your business what fund managers (and I'm not one of them, by the way) or anyone else, for that matter, earn? Is it coming out of your pocket? Are you competing with them for wages? By what twisted excuse for reasoning and logic do you arrive at the conclusion that you are somehow entitled to a share of their property?

Let's examine the AMT specifically. Back in the 1960's, 155 successful and clever Americans figured out a way to work within the rules and legally avoid paying taxes. The professional politicians, pandering to the lust of the dependent class they created, introduced the AMT to punish these 155 people for their resourcefulness. How is this fair? Shouldn't the rules be clearly defined and apply equally to all of us? The politics of jealousy and greed is ugly stuff, folks, especially when you keep in mind that what comes around usually goes around.

For those of you with a real steep learning curve (anyone who would give Hillary and her evil twin Chuck the Scmuck such high ratings must have a steep learning curve) let me lay out this history lesson for you. Back in the day, when the income tax was introduced, it was sold as something that would apply only to the very richest Americans, probably less than 1% of the population. Today we have a progressive income tax (along with the estate tax, taken right from the Communist Manifesto) which impacts virtually all Americans. Now let's jump ahead to the 1960's, when the AMT, intended to affect only 155 people, was introduced. Only a few decades later, we find it breathing down the throats of many millions of Americans. What does that tell you, people?

There's no such thing as a "good tax", even when it only applies to the "next guy". Don't you care that the politicans have bought so many of you by stealing from the minority and redistributing some of that to the majority? How does it feel to be a whore?

I swear I'd just laugh at hardcore libertarians if they didn't underlie the massive fiscal irresponsibility of Reagan and the two Bushes. Taxes are evil, robber barons are just industrious heroes, Ayn Rand is a great philosopher, and everyone who thinks otherwise is a communist. It's self-mocking, until someone in power takes it seriously, and everything starts going downhill: the debt ratio soars, wages for the bottom 50% of society stagnate or go down, work hours increase, the poverty rate climbs, public health worsens. That's not just Pinochet's Chile or other extreme cases; most of that applies to America after the Reagan Revolution.

who were the 155 families? I can't find their names published anywhere.

Frankenstien looks funny when i saw him as a cartoon