AMT 'fix' shows why we're restless, surly

Presidential candidates have wondered aloud at discovering a restless, surly populace. Unhappy about illegal immigration. Disdainful of politicians in general. Dismissive of the government's ability to do anything right.

And those candidates purport to not know why, but "why" is easy enough to explain. Just last week there was a good example in the passage of yet another Band-Aid for the out-of-date alternative minimum tax law.

The AMT, created in 1969 to catch rich tax dodgers, has become a financial albatross because it was never indexed for inflation. That means that as the years have gone by, more and more average folks have been swept up in a net never designed to catch them, sort of like the dolphins caught up in those nets of tuna.

The rich still have plenty of ways to avoid taxes, but the AMT is now catching people making as little as $75,000 and who have very few loopholes with which to protect themselves.

Rather than fix or eliminate a bad law, one that has created unintended consequences never envisioned at its inception, Congress has instead made it a perennial, end-of-the-year political hot potato. It changes the law just in time to assure it completely messes up the Internal Revenue Service's tax collections and refunds.

"Our people will do everything they can to quickly update our systems for this major change," said IRS acting commissioner Linda Stiff. But she said just changing all the required forms could take seven weeks. All of that chaos means, of course, that IRS employees won't be doing the work they're supposed to be doing while they're trying to fix the mess Congress created.

The IRS Oversight Board said the late congressional action would cause a delay in issuing 13.3 million refunds worth $39 billion. That's a lot of inefficiency imposed by Congress' inability to get its act together.

What caused the delay in this latest freeze, which extended protection from the AMT to up to 20 million families, many with incomes of between $75,000 and $200,000? Political philosophy, little of which is shared by those impacted.

The Democrats wanted to assure that revenue lost from AMT relief would be balanced by equal cuts or new tax revenue from elsewhere, preferably from friends of Republicans. The Republicans and President Bush argued that the AMT wasn't meant to affect millions and shouldn't be fixed by increased taxes elsewhere.

So they squabbled. And squabbled. And squabbled some more. Then they temporarily fixed a bad law in such untimely fashion that it created chaos and inefficiency for the IRS and guaranteed your refund will be late. And guess what? They'll do it all over again next year.

It doesn't take a genius to see why citizens are restless and surly, and trust just about anyone ahead of their elected representatives.