What Does AMT Tax Relief Have To Do With This?

What Does AMT Tax Relief Have To Do With This?

The Democrats' latest version of the Senate bailout bill contains yet another provision that has nothing to do with this crisis: AMT relief. From October 1, 2008 CNN:

The revised bill contains provisions that the Senate hopes will appeal to House Republicans, who voted two-to-one against the original legislation. The sweeteners include renewable energy tax incentives - for individuals and businesses alike - that have been on the table for several months and had a chance of passing at some point anyway.
The bill also includes relief from the Alternative Minimum Tax, without which millions of Americans would have to pay the so-called "wealth tax."
The debate over extending AMT relief is an annual political ritual. It enjoys bipartisan support but deficit hawks on both sides of the aisle contend the cost of providing that relief should be paid for. Others argue it shouldn't be paid for because the AMT was never intended to hit the people the relief provisions would protect. Nevertheless, lawmakers pass the measure every year or two.

Look, I understand the arguments for AMT relief, and there is some merit to them. I also understand that you don't have to be fabulously rich to get stuck with paying the Alternative Minimum Tax. Some years ago, I had to exercise my stock options in a startup very carefully (some in one year, some in the next) to avoid getting hit with AMT. But for the most part, AMT is mostly something that people who are at least well off, and often quite wealthy, pay. I do wish that Democrats who keep talking about Republicans as the party of the fatcats will stop this pretense. The Democrats are at least as much the party of fatcats--and adding this provision to the bailout bill (already a massive subsidy to a few wealthy businesses and their stockholders) just demonstrates this all the more.

UPDATE: Call your U.S. Senators now! 202-224-3121 Assuming that you can get through!