Democratic Candidates Silent on Alternative Minimum Tax

WASHINGTON — Fixing the costly alternative minimum tax may be a top priority for Democrats in Congress, but the issue has met with virtual silence from the party's leading contenders on the presidential campaign trail.

Neither Senator Obama of Illinois nor John Edwards of North Carolina make any mention of the tax in the detailed economic plans each has released recently, drawing criticism from some top policy scholars.

The absence of the issue from their campaign literature suggests that reforming the minimum tax, which could hit as many as 23 million Americans next year, is far lower on the candidates' wish list than for their counterparts on Capitol Hill.

The party's top tax-writer, Rep. Charles Rangel of Harlem, has set his sights on repealing the tax altogether, at a cost of $800 billion over 10 years. But because of the staggering price tag, Mr. Rangel, the chairman of the House Ways and Means Committee, is likely banking on having a Democrat in the White House who will back his efforts to raise taxes on corporations and top earners to pay for a repeal.

A lack of enthusiasm from top Democratic presidential hopefuls could hinder his plans.

Tax policy experts say it is unlikely that Mr. Rangel will be able to achieve more than a one- or two-year "patch" of the tax before 2009, due to its cost and opposition from the Bush administration to a broader reform involving tax hikes.

Although Messrs. Obama and Edwards are proposing tax increases on corporations and wealthy individuals, in many cases they plan to use the revenue elsewhere, such as providing tax credits for low- and middle-income families.

"It's a little bit surprising," the director of the Tax Policy Center, Leonard Burman, said of the decision by Messrs. Obama and Edwards to exclude the alternative minimum tax from their proposals. "I mean, it's the 800-pound gorilla in the room."

Mr. Obama used the Tax Policy Center, which is jointly run by the Urban Institute and the Brookings Institution, to unveil an $80 billion tax plan Tuesday that centered on giving up to $500 in tax credits to 150 million Americans in the middle class. He also proposed eliminating income taxes for seniors making below $50,000 a year and providing mortgage tax credits to homeowners.

A leading advocate of repealing the AMT, Mr. Burman called Mr. Obama's plan "a little disappointing" and said much of it was "just giving away tax breaks to large voting blocs."

Mr. Edwards, a former North Carolina senator, is proposing an expansion of the earned income tax credit along with incentives to encourage low- and middle-income families to save more money for retirement.

The front-runner for the Democratic nomination, Senator Clinton, has yet to release a detailed tax plan, but she has made AMT "reform" an element of what she calls "a new progressive vision" that she announced in May. Her campaign would not provide further specifics of her proposal yesterday, and she rarely if ever discusses it on the stump.

"The AMT is to some degree a complex, technical issue," a senior fellow at Brookings and an economic adviser in the Clinton administration, Jason Furman, said. "I don't think it lends itself to a campaign-style proposal."

Enacted in 1969, the minimum tax was initially intended to ensure that the wealthiest Americans did not avoid paying their fair share to the government. But because it was never adjusted for inflation, what began as a levy for the 150 highest earners could now affect 23 million taxpayers.

While Mr. Rangel and others bill a repeal of the AMT as tax relief for the middle class, tax scholars point out that many of those affected are still at the higher end of the middle-income level, often making more than $100,000 a year.

Messrs. Obama and Edwards, by contrast, have been striking a populist appeal on the campaign trail aimed at voters earning less money.

Of the eight Democrats running for president, only Governor Richardson of New Mexico has thus far made a full elimination of the AMT a plank in his economic platform. A spokesman for Mr. Rangel declined comment on the presidential tax plans yesterday.

Advisers to Messrs. Obama and Edwards did not explain why they did not address the minimum tax in their proposals, but each expressed support for fixing it.

A spokeswoman for Mr. Obama, Jennifer Psaki, said he believes it is "outdated and in need of sustainable, long-term reform. He looks forward to working in a bipartisan fashion to reform the AMT in the future."