Dick Lugar: “I am introducing today a bill to address what has become an increasingly heavy burden for middle-income taxpayers: the…”

“I am introducing today a bill to address what has become an increasingly heavy burden for middle-income taxpayers: the Alternative Minimum Tax, or AMT. My bill would retroactively index to inflation the exemptions used to calculate an individual taxpayer's AMT liability. The indexation would begin in 1993--the last time these exemptions were raised. The AMT is conspicuous for its lack of indexation. Under the regular income tax, the tax rate structure, the standard deductions, the personal exemptions, and certain other structural components are indexed so that taxpayers are not pushed into higher income tax brackets just because their income has kept pace with the cost of living. The Joint Tax Committee estimates that in 1997, 605,000 taxpayers were subject to the AMT. According to these same estimates, which take into account the changes in the Taxpayer Relief Act of 1997, taxpayers subject to the AMT could total 12 million by 2007. This is an increase of more than 1,800 percent in the number of taxpayers paying this particular tax. According to the Joint Tax Committee, this dramatic expansion of the AMT's reach can largely be attributed to the lack of indexation of the AMT exemptions.”