I've written before about how the alternative minimum tax needs to be fixed before it explodes into the middle class at the end of the decade -- a nasty problem that the Bush administration has used to keep deficit projections down. Surprisingly enough, the administration has insisted that any fixes be "revenue-neutral"; ie lost revenue from AMT modifications has to be made up with other tax increases. So why are Ron Wyden and Max Baucus to the administration's right on this issue? Yesterday's New York Times reports that they are endorsing Chuck Grassley's bill proposing AMT repeal with no effort to seek the revenue elsewhere -- a short-sighted decision that could lead to even more red ink by the end of the decade:
A top Senate Republican challenged a crucial element of President Bush's budget and tax strategy on Monday, calling for a repeal of the alternative minimum tax at a cost of at least $611 billion over 10 years.
...Robert J. Carroll, the Treasury Department's deputy assistant secretary for tax policy, told the subcommittee that any reductions on the alternative tax should be "revenue neutral."
...Mr. Grassley said he would introduce a bill this week to repeal the tax. The bill's co-sponsors are Senator Jon Kyl, Republican of Arizona; Senator Max Baucus, Democrat of Montana; and Senator Ron Wyden, Democrat of Oregon.
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