A January Congressional Budget Office report, "The Budget and Economic Outlook: Fiscal Years 2006 to 2015," made a more startling prediction. "When the provision (that temporarily increases the AMT exemption) ends," says CBO, "the number of returns subject to the AMT is expected to rise, jumping from 4 million returns in 2005 to 19 million the following year. As a result, AMT revenues are projected to increase from $15 billion in fiscal year 2005 to $31 billion in 2006."
That's the sucker punch.
It gets worse. CBO says 22.3 million taxpayers will pay $56.2 billion in AMT in 2007; 25.2 million taxpayers will pay $67.8 billion in AMT in 2008; and 28.2 million taxpayers will pay $81.4 billion in AMT in 2009. (See chart below.)
This brings us to President Bush's budget, which predicts federal receipts will increase from 16.3 percent of GDP in 2004 (the lowest rate in recent decades) to 17.5 percent in 2009 when Bush leaves office, helping bring the deficit down from 3.6 percent of GDP in 2004 to 1.5 percent in 2009. But Office of Management and Budget Director Josh Bolten said at a Feb. 7 press conference that this budget does not include the cost of U.S. operations in Iraq and Afghanistan after this year, or $664 billion in estimated transition financing over 10 years for the president's Social Security reform plan.
Or any cost for reforming the AMT.
To his credit, in a Feb. 8 speech to the Detroit Economic Club, President Bush cited the AMT as an unfair tax and one reason he wants comprehensive tax reform. At his Feb. 7 press conference, Bolten said the same. But he also said: "(W)hat the president has asked for is that the secretary of the treasury come forward with a proposal that, overall, looking at the whole tax code, is indeed revenue neutral."
That being the case, here are two questions millions of middle-calls taxpayers ought to be directing at a Republican Congress and a Republican White House: If you are going to spare us from the AMT, does that mean you are going to raise our taxes somewhere else? If you are even tempted to do so, why not instead actually cut government for a change?
THE AMT SUCKER-PUNCH
Year ---- Tax Returns Affected by AMT ---- AMT Receipts
2003 ---- 2.4 million ---- $11.1 billion
2004 ---- 2.9 million ---- $13.5 billion
2005 ---- 3.5 million ---- $15.4 billion
2006 ---- 19.4 million ---- $31 billion
2007 ---- 22.3 million ---- $56.2 billion
2008 ---- 25.2 million ---- $67.8 billion
2009 ---- 28.2 million ---- $81.4 billion
2010 ---- 31.2 million ---- $95.8 billion
Source: The Congressional Budget Office's" The Budget and Economic Outlook: Fiscal Years 2006 to 2015" (January 2005).
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