The New York State Society of CPAs has offered its own solution for the problem of the expanding alternative minimum tax, as the issue continues to get debated in Washington.
Last week, Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, issued a proposal for repealing the AMT while raising taxes elsewhere to compensate (see Rangel Unveils Tax Overhaul Bill). The proposal quickly attracted a storm of criticism from the other side of the aisle and even from some Democrats.
The NYSSCPA has a more modest proposal known as the Simplified, Exact, Transparent Tax, or SET Tax. The tax is based on the formula, "Income - congressionally defined subtractions (deductions) x rate = tax."
The tax uses a single rate, much like the flat tax. The NYSSCPA argues that it would allow taxpayers to see what taxes they owe, why they owe the tax, where their money is going and how deductions benefit them. The society also thinks the tax will improve the compliance rate while raising more tax revenue. For more information on the proposal, go to http://www.nysscpa.org.
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