July SGE Luncheon
"The AMT: Why it Matters and Why it is Hard to Fix"
Leonard Burman, Urban Institute, Tax Policy Center
July 19, 2007
Chinatown Garden Restaurant
Summary:
Among the Democrats' priorities when they took power was to fix the individual alternative minimum tax (AMT) so that it would no longer threaten the middle class with higher taxes and mind-numbing complexity. But some on both sides are quietly grumbling that the AMT is not an especially pressing problem--tax software makes the complexity largely irrelevant; in many ways, it is a superior tax system; and repealing or reforming the tax is politically very difficult in a world of PAYGO. Some also claim that we never should have counted on the AMT revenue so repeal or reform need not be offset by other tax increases or spending cuts. I argue that the AMT is a terrible tax system, even with tax software: it has horrendous marriage penalties, insidious bracket creep, generally higher tax rates than the regular income tax system, and rescinds some "tax preferences" that clearly reduce ability to pay. It also makes tax planning exceedingly difficult and may distort taxpayers' decisions due simply to confusion. I'll discuss some reform options and the political environment that might make reform possible.
Bio:
Leonard Burman is the Director of the Tax Policy Center, which he founded with several colleagues in 2002. He is also a Senior Fellow at the Urban Institute and a Visiting Professor at Georgetown University. He served as Deputy Assistant Secretary of the Treasury for Tax Analysis from 1998 to 2000, and as Senior Analyst at the Congressional Budget Office from 1988 to 1997. He is on the board of directors of the National Tax Association and the American Tax Policy Institute and on the editorial board of Public Finance Quarterly. He also serves on the IMF Fiscal Analysis Division's Panel of Experts and frequently advises governments on tax reform. He has served on several federal and local government advisory boards in the US. He is often invited to testify before Congressional committees on tax and budget policy issues. He is a commentator for the syndicated public radio program, Marketplace, and also appears regularly in national and regional media. In 2005, he and his son bicycled across the US to raise money for Partners In Health, a NGO serving Haiti and other countries (they raised over $108,000). He is the author of a critically acclaimed book, The Labyrinth of Capital Gains Tax Policy: A Guide for the Perplexed, and numerous articles, studies, and reports. Recent research has examined the individual alternative minimum tax, the changing role of taxation in social policy, and tax incentives for savings, retirement, and health insurance. He holds a Ph.D. from the University of Minnesota and a B.A. from Wesleyan University.
Chinatown Garden Restaurant 618 H St., NW,
Washington Metro: Gallery Place (Red, Green, and Yellow Lines). Restaurant is 1/2 block east of the Metro station's northern (H Street) exit.
Reservations by 11:30 am July 18th, to Jonathan Schwabish Jonathan.Schwabish@cbo.gov or 202-226-5667.
$15 for SGE and NEC members $20 for non-members