I had to pay alternative minimum tax last year for the first time. It was a complete surprise and I’m still not sure exactly what kicked the AMT higher than my normal taxes. I didn’t do anything obviously different or change my spending habits. Worse–I have no idea if it will hit again this year. Something about calculating two different tax amounts and having to pay the highest makes me feel like I’m getting ripped off.

One of the things I’d love to see from our new Democratic congress is fixing the AMT. There’s a great article in Investment News that discusses it. They correctly point out the ridiculousness of the pro-AMT arguments:

According to members of Congress, the problem with fixing the AMT is that it brings in a lot of money. But in 2007, it is projected to take in only about $20 billion — less than 2% of projected federal revenue. What members of Congress are saying is that they can’t find $20 billion in discretionary budget spending of more than $1 trillion to offset the loss of that AMT tax revenue.

Not only is it broken, it’s getting worse:

The bigger problem is that by 2010, that revenue is projected to rise to $95 billion but still be only about 4% of projected federal revenues.

Most people realize that AMT is broken. The problem is it’s so broken, it’s starting to account for a significant chunk of our tax revenue. And we can’t afford to lose that revenue. Ridiculous.