A Wisconsin congressman is pushing a plan to dump a controversial tax and simplify the tax code.
The Alternative Minimum Tax or AMT was introduced in 1969 to keep one hundred and fifty-five wealthy Americans from sheltering income from the IRS.
But because the law was not written correctly, Congressman Paul Ryan (R-Janesville) it was indexed for inflation and in three years thirty-five million taxpayers will be hit by the AMT, most of them middle income families. Ryan says that was never meant to be.
Ryan wants to get rid of that tax and give taxpayers a choice of using a simpler system.
Under Ryan's Simplified Tax System there would be one flat rate of 10% for joint filers making $100,000 or less. ($50,000 for single filers) and 25% tax rate on taxable income above that. There would be no deductions but there would be what he calls a generous standard deduction.
Taxpayers could then choose which system works better for them. The current tax code of the simplified one.
Ryan contends either way the IRS would get the same projected revenue while keeping taxes down. Washington, he says, just needs to cut spending.