Obama's idea of "tax reform," by contrast, is the "Buffett Rule," which says "if you make more than $1 million a year, you should not pay less than 30 percent in taxes." This is just a new wrinkle on the alternative minimum tax (AMT), which the national taxpayer advocate calls "the poster child for tax-law complexity," the "most serious problem facing taxpayers." The AMT, itself grotesquely complicated, was a response to the complexity that allows rich people to avoid taxes. It has morphed into a covert mechanism to spring tax hikes on people who are decidedly not rich.
The AMT encapsulates the problems with a system so byzantine that even Mitt Romney, a wealthy, financially sophisticated guy with plenty of expert help, can't figure out how much he owes. New York Times financial columnist Floyd Norris reports that the Republican presidential candidate overpaid by about $44,000 last year because of a capital gains miscalculation.
Yet in the same speech where Obama condemned the "loopholes and shelters" that rich people use to avoid paying their "fair share," he promoted policies that compound the complexity, including special breaks for college students, "companies that hire vets," "small businesses," "high-tech" manufacturers, "clean energy," energy-conserving building improvements and "companies that choose to stay here and hire here in America." This insistence on using taxes for economic meddling and social engineering has made the system the hideous mess it is today.
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