At minimum, a tax disagreement

Re “Fair taxes, the AMT way,” Opinion, Oct. 20

Michael Kinsley’s interpretation of the alternative minimum tax bears minimal relation to reality. The actual amount bears little relation to his simple formula, primarily because it has no direct effect on long-term capital gains.

The 15% maximum rate for capital gains -- which I happily exploit -- is probably the most significant regressive item in the federal tax code.

All the AMT does is eliminate deductions, whether standard or itemized. Typically, itemized deductions are dominated by mortgages, state taxes, medical expenses and charitable contributions, but those could be limited more simply without AMT.

But how can anyone defend the taxation of state tax payments? Most states have highly regressive tax structures, and those with low (or zero) income tax rates tend to be the worst; California has a fairly flat tax structure overall. The AMT unfairly transfers income from the most progressive (usually blue) states to the most regressive (usually red) ones. That is indefensible.

George Tucker

Redondo Beach

Kinsley seems to imply that we need the AMT to make sure the rich pay some taxes. This is basically a con. As he well knows, the effect is harshest on taxpayers with annual incomes of $100,000 to $500,000. The truly rich typically are not affected because their regular tax rates already are higher than under the AMT.

Philip Shaw

Mill Valley, Calif.

The AMT is just another unintended consequence of our broken and destructive income tax system. The system is killing off the “Made in America” label, driving trillions of dollars offshore, and is an expensive annual torture for taxpayers. It has become an almost indecipherable patchwork quilt of congressional favors and punishments, a lucrative industry for tax lobbyists and a profitable playground for D.C. academicians.

The debate about fixing the AMT will reveal whether Congress is even capable of correcting this latest assault on taxpayers caused by its own error and compounded by bipartisan dishonesty in relying on the revenues.

If Kinsley likes the AMT as the new tax system, he should consider the Fair Tax, a progressive national sales tax that eliminates the embedded taxes killing American companies, deals tax lobbyists out and removes congressional politics from the national tax system.

Ken Hoagland

Houston