The U.S. Senate is considering passage today of a Wall Street bailout modified to include tax breaks for the wealthy.
The measure includes a provision to reduce the “alternative minimum tax,” a tax originally designed to make sure millionaires couldn’t deduct away all their taxes.
Citizens for Tax Justice, a leading non-partisan fair taxation think tank, analyzed the impact of a similar AMT elimination proposal in 2006. Here’s what they found:
“The 62 percent of all taxpayers earning less than $50,000 would get virtually
nothingâ€”an average tax reduction of $3.
The best off one percent of taxpayers, those making more than $400,000,
would get almost a quarter of the tax reductionsâ€”an average of $8,385 each.
The 1/10th of one percent of taxpayers making more than $2 million would get
tax cuts averaging $22,862 each.
The total tax reduction for the 127,000 taxpayers making in excess of $2 million
would be 13 times as large as the total tax reduction for the 85 million
taxpayers earning $50,000 or less.”
Oregon’s Democratic Senator Ron Wyden was listed as a supporter of the AMT tax cut for the wealthy in 2005.
According to an analysis of a similar AMT proposal by CTJ, 90 percent of the tax cut will go to the wealthiest 20 percent of Americans.
The AMT cut could appeal to conservative Republicans, but it could also increase bailout opposition among Democrats.
â€œWith all the financial problems facing our nation, itâ€™s bizarre that some Senators think our most pressing need is to pass still more tax cuts for the wealthy,â€ said Robert S.
McIntyre, director of CTJ in 2005.