Senate panel takes aim at 'stealth tax'
Sun May 22, 2005 10:49 AM ET
By Donna Smith
WASHINGTON (Reuters) - It is called the "stealth tax" because most U.S. taxpayers are unaware of it, but in a few years, millions of people will pay the so-called alternative minimum tax that only the rich were supposed to pay.
The alternative minimum tax, or AMT, was enacted in 1969 amid reports that 155 taxpayers making more than $200,000, a tidy sum at the time, paid no taxes at all because of deductions and other income tax exemptions.
But what started as a tax to ensure that the wealthiest Americans did not escape paying federal taxes soon will hit more middle-class earners. This year, about 3 million people will pay the AMT and that will grow to 35 million by 2010 unless Congress acts.
A Senate Finance subcommittee opens hearings on Monday on the AMT in preparation for an expected tax reform push by President Bush. A White House commission charged with recommending ways to make the tax code simpler and fairer is expected to publish a report by the end of July.
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