The alternative minimum tax (AMT) was enacted in 1969 to target 155 wealthy households who were able to arrange their tax liabilities such that they paid little if any taxes1. I was a freshman in college when the announcement was made by the then secretary of the treasury Joseph Barr three days before Richard Nixon was to take office.

This was at the height of the Vietnam war and as much as we college students were grateful for the end of Lyndon Johnson’s presidency, I personally was troubled at a “black list red baiter” Joseph McCarthy protégé assuming the presidency – not to be confused with Eugene McCarthy who recognized that there was nothing to win in Vietnam and sought the Democratic presidential nomination in 1968 promising to end the Vietnam war. Regretfully, he did not win the nomination at the disastrous 1968 Chicago Democratic convention and it took another 45,000 Americans deaths for us to leave in 1975.

So in the middle of January 1969, when we were all consumed with getting out of Vietnam, participating in local and national demonstrations, comes this wave of public indignation about 155 wealthy families with incomes greater than $200,000 paying no taxes. The indignation trickled down to my dinner table at the college commons where we were all just shaking our heads in disgust. Today, $200,000 annual income does not seem an obscene amount, but then it represented $1.3 million in today’s dollar.

So the congress acted to target these 155 households and make them pay their fair share.

Therein lies the problem. Since the AMT was not indexed to inflation, it has now caught 2.5 million households in its grip2. The AMT disallows deductions for mortgage payments, state and local – property – taxes, family exemptions (children) and losses from investments which are used mainly for retirement or college savings. By particularly disallowing the deduction for state taxes, it hits those hardest that live in states with high tax rates – New York.

The AMT hits those families with incomes as little as $50,000. Nearly 40% (65,564)3 of families and over 30% (75,797) of households in our district are in the income brackets that are subject to the AMT4. So why did our congressman turn his back on the middle class and vote against repealing the AMT? The word play – spin – is that repealing the AMT will raise taxes. VERY TRUE. It will raise taxes on hedge fund managers. So what. What do hedge fund managers contribute to our society that they should command such wealth and not be expected to pay full income taxes on their gains. Of course, I could ask the same question regarding Dennis Rodman. What intrinsic value does he have? He at least however pays full income taxes.

Additionally the house bill targeted those making greater than half a million dollars a year. I’ll remind our congressman that income bracket represents far less than one percent of our district. So why is he protecting this exceedingly minute population of our district? It doesn’t make sense. Does he owe this type of money anything? We know he doesn’t get much of his campaign money from our district. Most of comes from the inside the beltway. What’s the connection between those making at least a half a million a year and our congressman’s vote.

The Democratic congress responsibly recognizes that cutting taxes is not enough. Bush – enabled by McHugh – has driven this country into unprecedented debt, wreaking havoc with the value of the dollar. The last time we had a budget surplus was under Bill Clinton. McHugh along with his republican handlers have created the largest, most expensive, most intrusive government we have ever seen.

So my question is this. Why did you vote against the middle class, and when are you going to be responsible and stop voting for increase government spending without covering it with appropriate revenue? It’s good for votes, but horrific for our – and significantly not his – children.
1. Lori Montgomery, “Democrats Craft New Tax Rules, New Image,” Washington Post, April 23, 2007.
2. Jonathan Weisman, “Falling Into Alternative Minimum Trouble,” Washington Post, March 7, 2004.
3. Family Incomes, NY23, US Census 2000.
4. Household Incomes NY23, US Census 2000.