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Economic News, Data and Analysis

Misquote/Clarification in the Post

Update: Just spoke w/L. Montgomery – a clarification is in the works…
I was quoted today in the Washington Post. Unfortunately, they got the context backwards.

Democrats Craft New Tax Rules, New Image – washingtonpost.com
[…] Some Democratic strategists also question whether the proposal carries a political advantage. John Irons, director of tax and budget policy at the Center for American Progress, said overhauling the AMT may hold “more danger in it than credit.” […]

1) Apparently I am now a Democratic strategist… maybe I should ask for a pay raise!
2) What I had said was that there is “more danger” in NOT fixing the AMT, than there will be credit for fixing it. Because the number of people who will be hit by the AMT will grow over time, a fix to the AMT will spare people from a tax that they currently do not see. Thus, NOT fixing the AMT will be felt more acutely than any benefit from a fix.
This is a kind of loss-aversion argument in a political context.
I hope I also spent sufficient time on the phone explaining that the right approach is to reform or eliminate the AMT while at the same time ensuring that upper-income taxpayers are not able to dodge their tax responsibility. And also that a permanent fix to the AMT is needed.
This is certainly the approach we take at CAP. AMT reform ought to be part of a more comprehensive overhaul of the tax code (For one possible example, see this article I wrote w/John Podesta).

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