Roberton Williams is the Sol Price Fellow at the Tax Policy Center. He was at the Congressional Budget Office from 1984 through 2006, most recently as Deputy Assistant Director for Tax Analysis, and before that an assistant professor of economics at Williams College. He has written numerous papers on tax policy, income distribution, and social welfare programs.
Stories about the Affordable Care Act often tell readers that they’ll have to pay a $95 penalty if they don’t get adequate health insurance coverage. But, like a lot of other things I read about the health law, that’s not quite correct. The penalty (which the Supreme Court said is actually a tax) could be less or, more likely, a lot more. It’s a complicated story.
The basic penalty is $95 in 2014—if you’re unmarried with no dependents and your income is less than $19,500. If your income is higher, you’ll owe more: 1 percent of the amount by which your income exceeds the sum of a single person’s personal exemption and standard deduction in the federal income tax. That’s $10,000 in 2013. But be warned: Income equals adjusted gross income (AGI—that number on the last line on page 1 of your tax return) plus any tax-exempt interest and excluded income earned abroad. If you make $30,000, your penalty will be $200.
Still with me? Good, because it is about to get more confusing.
If you’re married or have kids, you’ll owe a minimum of $95 per person for yourself, your spouse, and each dependent over age 17 plus half that amount for each child under 18. But the total can’t exceed three times the basic $95 tax, or $285. Except it can. If 1 percent of your income (minus your and your spouse’s personal exemptions and standard deduction—$20,000 in 2013—plus those add-ons) is more than $285, that’s what you’ll owe. Oh, and you’ll have to include your dependents’ income in the calculation.
But there’s a cap. Your total penalty can’t exceed the national average premium for a bronze-level health policy for your family’s size. We don’t know what that is yet but it’s surely more than $95. CBO projects that the average bronze premium in 2016 will be between $4,500 and $5,000 for an individual plan and more than $12,000 for families. If your income exceeds $1.2 million next year, that ceiling might apply.
That’s just for 2014. The penalty will grow over time: The dollar minimums will be $325 in 2015 and $695 in 2016 and will grow with inflation after that (rounded down to multiples of $50). By 2023, it will hit a projected $800. And the percentage of income penalty also grows—to 2 percent in 2015 and 2.5 percent after that.
Some people won’t have to pay the tax. Even if you don’t have insurance, you’re safe if you have religious objections to health insurance, are an American Indian, are in jail, or are “not lawfully present” in the U.S., among other reasons. You’re also protected if buying insurance would impose economic hardship. That happens if it would cost more than 8 percent of your income (defined slightly differently of course).
If you owe a penalty, you’re supposed to pay it with your income tax return. But there’s not much the IRS can do if you don’t pay. They can’t put you in jail or garnish your wages. In fact, about the only way the IRS can collect is if you’re due a refund. They can deduct the penalty from this year’s and future refunds.
A well-known radio personality is urging people to avoid the penalty by making sure you won’t get a tax refund. Ignore him. Trying this requires many years of careful planning and is easy to mess up. Besides, most Americans love their refunds.
There is, of course, a simpler way to avoid the penalty: Sign up for health insurance.
Last week’s IRS ruling on same-sex marriages received a lot of attention. Going forward, a same-sex married couple must file federal income tax returns as married, regardless of whether the state where they live recognizes their marriage. In addition, same-sex couples may—but don’t have to—file amended returns for some earlier years to recoup any extra taxes they paid because they had to file as individuals.
But most reports on the ruling have missed an important detail: the IRS will begin applying the new rule on September 16. That gives same-sex couples who haven’t yet filed their 2012 tax returns just a few more days to file as individuals if they choose to do so. For some, that could mean a much smaller tax bill.
At issue are marriage penalties, the additional income tax some couples have to pay because they must file their federal tax returns as married. Because tax parameters aren’t proportionately higher for couples than for singles—for example, higher tax brackets for joint filers apply at less than twice the income as for individuals and phase-in and phase-out ranges don’t start at double the income level—some couples pay more income tax than if they were single. That’s most likely to be the case if spouses have similar incomes.
For example, if both spouses earn $100,000, have no children, take the standard deduction, and have no other income, their 2012 tax bill filing jointly would be $38,319. If they could file individual returns, each would pay $18,731 in income tax. The total—$37,462—would be $857 less than what they’d pay as a couple. They pay a marriage penalty.
Of course, many couples pay less tax than they would if they were single and thus get a marriage bonus. If one spouse earned all of the hypothetical couple’s $200,000 income and the other earned nothing, filing jointly would save them nearly $9,000, a hefty marriage bonus.
It’s not always obvious whether a couple will pay more or less tax because they are married. You can get an idea of the difference between filing jointly or as individuals using the Tax Policy Center’s Marriage Bonus and Penalty Calculator. But one warning: the calculator cannot take account of every tax situation—you’ll have to complete and compare joint and single tax returns to find the exact bonus or penalty. Of course, the same rules will soon apply to both same-sex and heterosexual couples.
For a few more days, however, same-sex couples who were legally married last December 31 and who haven’t yet filed their 2012 tax returns can avoid marriage penalties one last time by filing individually. If you’re in that situation, you could save a lot of money if you get your 2012 tax return in soon.
Disclaimer: the Tax Policy Center doesn’t give tax advice. If you have any doubts about how the new tax laws would affect you, consult a real tax advisor.
Most of the 43 percent of Americans who the Tax Policy Center projects will pay no federal income tax this year make very little money. Some are middle-income households that qualify for enough tax preferences to zero out their tax bills. But more than 70,000 households with income over $200,000 will pay no federal income tax in 2013. How will they do that?
Some have very high medical expenses but the two biggest reasons are linked to their investments: foreign tax credits and tax-exempt bonds.
TPC’s hit video explains why the 43 percent pay no federal income tax. But for a closer look at why high-income households pay no income tax, it helps to turn to the IRS’s Statistics of Income (SOI) division.
Each year, SOI focuses on two overlapping groups of returns with income over $200,000: those who pay no income tax to the U.S. and those who pay no tax worldwide.
The first includes people whose U.S. liability is zeroed out by domestic tax preferences combined with foreign tax credits and the exclusion of overseas income taxed abroad. The second includes only those who don’t pay any net income tax at all. The analysis also uses two alternative measures of income to define high-income tax units: adjusted gross income (AGI) and “expanded income,” which adds excluded income such as tax-exempt interest and untaxed Social Security. (The second measure is closer to—but not the same as—the Tax Policy Center’s “expanded cash income.”)
The latest installment of the SOI analysis found that about 3 percent of the 143 million tax returns filed in 2010—4.3 million—had expanded income over $200,000. Almost 33,000 (0.8 percent) paid no tax to the IRS in 2010 and about half of those paid no income taxes worldwide.
Nearly 40 percent of those paying no domestic income tax benefitted most from the foreign tax credit and roughly another third saved most because of tax-exempt interest. Various itemized deductions mattered most for about 15 percent of tax filers.
Among those who had no worldwide tax liability, coupon-clipping was the biggest reason. Fully 60 percent of the 16,000 returns paying no net tax benefited most from tax-exempt bond interest. Extraordinary medical expenses, which are currently deductible to the extent that they exceed 10 percent of AGI, were the main reason why another 11 percent of high-income households paid no tax.
It’s likely that some taxpayers save a lot by using tax avoidance techniques that don’t show up in the SOI data. Some of the most successful tax shelters simply defer or otherwise mask income so that a well off person can appear to have relatively modest means.
Most of the high-income tax filers who don’t pay income tax hardly get off scot-free. Those who don’t pay the IRS because of foreign tax credits obviously ante up to other countries. Those who benefit from the exclusion of municipal bond interest pay an implicit tax since tax-exempt bonds earn a lower interest rate than taxable bonds. And, of course, high-income households pay many other taxes. But for a small group of lucky duckies, our current system of tax preferences makes it possible to avoid paying any federal income tax.
Just two weeks ago, I discussed potential tax issues a same-sex married couple could face if they live in a state that doesn’t recognize their marriage. Yesterday the IRS ruled that, for tax purposes, such couples are married regardless of where they live. That ruling answers the question of what filing status the couple must use but also complicates tax filing for same-sex couples that live in states that prohibit their marriages.
The IRS based its decision on a 1958 ruling that recognized common law marriages established in states that allowed them, even if a couple subsequently moved to a state that did not recognize such unions. Affected couples could continue to file federal tax returns as a married couple, even though their resident states considered them to be single. Notably, yesterday’s ruling also said that the IRS will not consider registered domestic partnerships, civil unions, and other similar formal relationships to be marriages.
The ruling renders half of the table in my earlier post irrelevant (see new table) but leaves in place the table’s most complicated cells. A same-sex married couple that lives in a state that doesn’t recognize their marriage will have to file a married federal return and two individual state returns. In many states, the latter will require them to create two fictitious individual federal returns, because such returns are the basis for filing their state returns. Tax preparation software will surely handle the complication seamlessly but affected couples will still have to make decisions about which spouse claims their various deductions and non-wage income. And pity the couples that complete their tax returns the old fashioned way using pencil, paper, and a calculator.
The IRS ruling allows—but does not require—same-sex couples to amend tax returns filed over the past three years, refiling as married couples. Some couples should not refile: they could incur a dreaded marriage penalty, but they may have to fill out a new return to get the bad news. Going forward, they won’t have any choice—they will have to file married returns.
That decision is further complicated for couples in which one spouse has paid taxes on employer-paid health insurance premiums to cover the other spouse. Until now, those premiums counted as earnings and were subject to both income and payroll taxes. Premiums often totaled thousands of dollars each year and resulted in significantly bigger tax bills. The IRS now says that workers can amend tax returns to exclude that fringe benefit (and others) from taxable income. They can also recover any extra payroll taxes they incurred—as can their employers.
The IRS ruling means that, at least for tax purposes, the marital status of same-sex couples won’t change when they move across state lines. But that doesn’t mean that their lives will be any easier when April 15 rolls around.
The percentage of Americans who pay no federal income tax is falling, thanks to an improving economy and the expiration of temporary Great Recession-era tax cuts. In 2009, the Tax Policy Center estimated that 47 percent of households paid no federal income tax. This year, just 43 percent will avoid the tax.
TPC’s 2009 estimate went viral during the following tax season and then played a supporting role in last year’s presidential election. Many commentators misinterpreted the estimate as saying that nearly half of all households paid no tax at all when, in fact, nearly everyone pays something. Even if they don’t pay federal income tax, Americans almost all pay Social Security and Medicare payroll taxes, state and local sales taxes, excise taxes, or some other levy.
This new TPC whiteboard video explains what’s really going on and why the number of people paying no federal income tax is falling.
The new TPC estimates project that the fraction of households with no federal income tax liability will continue to fall over the next decade. By 2024, only one-third will pay no income tax.
Of the 43 percent of households that will owe no federal income tax this year, nearly half will be off the rolls because their incomes are too low. The rest won’t pay because preferences wipe out the taxes they would otherwise owe. Many of those preferences, such as the Earned Income Tax Credit and the Child Tax Credit, are social policy run through the tax code. If those provisions were considered spending rather than tax cuts, many more people would be counted among income tax payers. (Indeed, for budgetary purposes, much of the value of those tax credits is considered an outlay.)
Fully two-thirds of households that pay no federal income tax have workers that pay payroll taxes. Most American workers pay more in Social Security and Medicare payroll taxes than income taxes. Just 14 percent of households pay neither income nor payroll tax and two-thirds of them are elderly.
Most of the rest are younger households with no workers and income under $20,000. They pay no income taxes because they have little or no income. The remaining 1 percent mostly benefit from the tax code’s many exclusions, deductions, exemptions, and credits that wipe out the income tax they would otherwise owe.
Even the 14 percent of households that pay neither income nor payroll tax do pay other taxes. Most of us bear some of the burden of the corporate income tax through reduced earnings in our retirement and investment accounts or somewhat lower wages. Anyone who buys gas, tobacco products, alcoholic beverages, or airplane tickets pays federal excise taxes. And it’s nearly impossible to avoid all state and local taxes—the income, sales, and property taxes that support state and local governments.
The notoriety of the 47 percent figure has come largely from a misunderstanding—or less charitably, a misrepresentation—of what that number actually means. Check out the video and learn the real story about why people pay no income tax and why the number of those who don’t is falling.
The tax act Congress passed early on New Year’s Day permanently patched the alternative minimum tax (AMT), sparing tens of millions of Americans from the additional levy. But it won’t protect everyone. The AMT will continue to raise the taxes of a few million taxpayers each year, often in seemingly capricious ways. And more and more Americans will owe AMT in future years.
New estimates from the Tax Policy Center project that 3.9 million taxpayers will pay an average of about $6,600 in AMT for 2013, increasing their average effective tax rate by 1.7 percentage points. And the percentage of taxpayers who owe the additional tax—4.2 percent this year—will rise steadily over the next decade before leveling off at about 5.5 percent. That means more than 6 million taxpayers will pay AMT in 2023.
As in the past, married couples, families with more children, and people living in high-tax states will be most likely to incur the added tax. Taxpayers with income between $200,000 and $1 million will be most affected: about one-third of them will owe AMT.
For nearly a decade, Congress temporarily adjusted the AMT exemption every year or two to keep the tax from hitting millions of unsuspecting taxpayers. Those fixes often came late in the year, creating a lot of uncertainty for taxpayers. The American Taxpayer Relief Act of 2012 (ATRA) permanently indexed the exemption and other AMT parameters. Congress might have gone the extra mile and eliminated the AMT entirely, but that would have cost more than $350 billion in lost revenue over the next decade.
So the AMT lives on, complicating the tax returns of more Americans every year. For many, it will come as a nasty surprise: new AMT taxpayers often learn about the bonus tax only when a letter from the IRS tells them they owe extra tax plus interest and possibly penalties.
And, as bad tax policy as it is, the AMT is unlikely to go away—not unless comprehensive tax reform finally rids us of this tax code abomination.
It’s been less than two months since the Supreme Court ruled part of the Defense of Marriage Act (DOMA) unconstitutional and the fallout has only begun to settle. Nowhere is there more uncertainty about the effects of the ruling than regarding federal taxes.
The court struck down Section 3 of DOMA, which denied federal recognition of same-sex marriages. It left in place Section 2, which allows states to refuse to recognize same-sex marriages performed in other states. That means that if a same-sex couple legally married in a state that allows gay marriage subsequently moves to a state that doesn’t, their marriage ceases to exist where they reside.
What does that mean for the couple’s federal taxes? While they live in a state allowing same-sex marriage, the couple must file federal tax returns as a married couple. What happens when they move to a state that denies their marriage is not yet clear. That depends on whether the IRS decides to define marriage based on the couple’s residence or their “place of ceremony,” the state where they were married.
Historically, the IRS has followed a residency rule in determining marital status. If the state where you live says you’re married, you must file your federal tax return as married (although that obviously didn’t apply for same-sex couples under DOMA). If your state says you aren’t married, you must file as unmarried.
Under a residency rule, a married same-sex couple living in Maryland–which recognizes their marriage—must file their federal tax returns as married, either jointly or separately. If they move across the Potomac into Virginia—which constitutionally bars recognition of all same-sex marriages—they must switch to filing single or head of household returns. Unless Congress or the courts undo DOMA’s Section 2, that situation will prevail.
If the IRS chooses instead to switch to a place of ceremony approach, same-sex couples who marry in one of the 13 states or the District of Columbia that allow such marriage will have to file their federal tax returns as married, regardless of where they subsequently live. State law will determine their state tax filing status but they would file the same federal returns regardless of where they live.
So far, the IRS has given no indication of which approach it will follow. However, other parts of the federal government have chosen the place-of-ceremony approach. In fact, the Defense Department has gone so far as to grant up to ten days leave for same-sex couples living in states that bar their marriage so they can travel to wed in states that will let them marry.
So where does that leave same-sex couples? It depends (see table).
A married same-sex couple living in a state that recognizes their marriage will no longer have to file tax returns as married with the state and single with the feds. Depending on the couple’s financial circumstances, filing a joint federal return may incur a marriage penalty or reap a marriage bonus, neither of which could occur under DOMA. The couple will also have to decide whether it makes sense to amend their federal tax returns for the past three years to claim any tax savings they might get filing jointly. The IRS has said that couples may—but don’t have to—amend those returns. Presumably those getting marriage bonuses would generally opt to refile, while those incurring penalties would not.
The situation facing a same-sex couple that wed in a state that allows same-sex marriage but now lives in a state that does not depends on how the IRS determines their marital status. If the IRS continues to use a residence approach, they, like all other same-sex couples in states that don’t allow same-sex marriage, will file both state and federal tax returns as individuals.
If the IRS instead moves to a place-of-ceremony approach, the couple will have to file federal tax returns as a married couple and state tax returns as individuals. Since state returns often start with values taken from federal returns, that means they will bear the additional burden of having to prepare individual federal returns and not file them.
It’s not obvious what the IRS should do. Marriage has traditionally fallen in the province of state law, which suggests that a residence rule should apply. But imposing a change in filing status on couples simply because they move across state lines makes little sense from either a tax or social policy perspective.
Covering the revenue loss from deep individual income tax rate cuts while maintaining the income tax’s current progressivity is difficult, as Howard Gleckman explained here last week. It turns out that paying for corporate tax rate cuts is even harder. And new Tax Policy Center estimates show that lowering corporate tax rates without paying for lost revenue would be highly regressive.
Calls for reducing the top corporate tax rate from the current 35 percent have come from a wide array of sources, ranging from the president to members of Congress on both sides of the aisle to the business community and many economists. Our top rate is higher than that of any other developed country. That discourages investment in the U.S., and encourages income-shifting to avoid tax. Cutting our corporate tax rate makes economic sense.
But, as is the case with the individual income tax, proposals to reduce corporate taxes haven’t included specific provisions to replace the lost revenue.
That cost isn’t small: The Joint Committee on Taxation recently estimated that cutting the rate to 25 percent—and eliminating the corporate alternative minimum tax—would reduce revenue by $1.3 trillion over the next decade. Proponents of rate cuts generally imply that they would cover the lost revenue by paring back or eliminating corporate tax expenditures. The problem with that is there aren’t enough of the latter.
On paper, the sum of Treasury estimates of corporate tax expenditures appears to be big enough that eliminating them could pay for the rate cut. But a closer look suggests otherwise.
The two biggest tax expenditures are the deferral of foreign-source income of U.S. controlled foreign corporations and accelerated depreciation for machinery and equipment. But eliminating deferral would raise much less after the rate cut than the tax expenditure estimate, simply because deferral saves much less tax with lower rates. And in any case, Congress is unlikely to cut back on deferral: this year’s House budget resolution went the other way, proposing a territorial tax that would exempt most foreign-source income.
Eliminating accelerated depreciation is also unlikely. Recent administration budgets have proposed making depreciation more generous, not less. And eliminating accelerated depreciation to pay for rate cuts for all corporations would raise the effective tax rate on new investments in U.S. manufacturing.
Take those big preferences off the table and the revenue potential of base-broadening shrinks dramatically.
If we don’t pay for a corporate rate cut by broadening the tax base, whom would the cut benefit (beyond any potential boost to the economy)? Even though corporations write the checks, the tax is ultimately borne by people—investors, workers, or consumers. While economists disagree about how the burdens are distributed, our best reading of the evidence is that 20 percent of the tax falls on workers and the rest hits owners of capital. Most of the tax falls on high-income households because they own most of the nation’s capital.
As a result, reducing the corporate tax rate by itself would be highly regressive, as TPC’s new tables show. More than two-thirds of the tax savings would go to the top 20 percent of households and slightly more than half of that to the top 1 percent—households making more than about $2.1 million in 2015. Their taxes would drop an average of more than $35,000 that year, boosting their after-tax income by 2.6 percent. In contrast, people in the middle 20 percent—making an average of about $66,000—would pay an average of $300 less in corporate income tax, ticking their after-tax income up just 0.5 percent.
If it were possible and politically feasible, paying for the rate cut by paring back corporate tax expenditures would undo some or all of that regressivity. Just as lowering corporate taxes disproportionately benefits high-income taxpayers, raising the tax disproportionately harms them.
Whether Congress can find enough tax increases to offset the revenue lost from cutting corporate tax rates will determine the answers to two important questions: whether corporate tax reform will be revenue neutral and whether changes will affect the progressivity of the tax.
Same-sex couples are cheering the Supreme Court’s striking down the Defense of Marriage Act (DOMA), but the tax consequences are more of a mixed bag. For many couples, federal recognition of same-sex marriages will mean lower tax bills, but some gay couples will end up paying more.
As I discussed here a few months back, DOMA’s mandate that the federal government not recognize same-sex marriages denied same-sex couples both the tax savings and higher tax bills that marriage can bring. Today’s Supreme Court decision reverses that, exposing gay couples to both marriage bonuses and penalties. Of course, that applies only to same-sex couples married in states that allow them to marry. (It’s unclear how the ruling affects same-sex couples married outside the United States.)
Estate taxes were the issue that motivated the DOMA case. Edith Windsor sued the federal government because her wife’s estate had to pay more than $363,000 in estate taxes. The estate would have paid nothing if the federal government recognized her marriage.
The estate tax provides only marriage bonuses. An estate may claim an unlimited spousal exemption for inherited assets—and thus pay no tax—while the total exemption for all other heirs is limited, currently to $5.25 million. And any unused part of that limited exemption carries over to the estate of the surviving spouse, thus guaranteeing that $10.5 million of the couple’s combined assets will go to heirs estate tax-free. DOMA’s demise can thus result in lower estate taxes for same-sex couples, although very few will be affected: less than 0.2 percent of decedents leave estates big enough to owe tax.
The outcome is not always so good regarding federal income taxes: many same-sex couples will find that federal recognition of their marriages means higher income tax bills. Legislation enacted in 2001 and 2003 protects most middle-income households from marriage penalties (and increased the size of marriage bonuses), but low- and high-income couples can incur substantial marriage penalties, most often when both spouses have similar incomes.
DOMA protected same-sex couples from that outcome by requiring them to file as individuals. In contrast, couples in which spouses have very different incomes will likely receive marriage bonuses—lower income tax bills than they would pay as individuals.
There’s even more good tax news for same-sex couples with marriage bonuses: they can file amended tax returns as married couples for the last three tax years and collect the marriage bonuses DOMA denied them.
There’s even a sliver of good news for same-sex couples incurring marriage penalties. They probably won’t have to amend their recent tax returns and pay the additional income tax they would owe if they had filed as married couples.
From the start of his 2008 campaign, President Obama has called for raising taxes on the rich. He got much but not all that he wanted in the American Taxpayer Relief Act (ATRA) earlier this year. Now his FY2014 budget takes another couple of bites at that apple.
The first repeats his proposal to cap at 28 percent the value of itemized deductions and specified exclusions, which would raise $530 billion over ten years. The president has pushed this idea in each of his five budgets, expanding it last year to include selected exclusions ranging from interest on municipal bonds to employer-paid health insurance premiums.
This year’s new wrinkle would extend the limitation to some taxpayers with income below Obama’s threshold for being rich—$250,000 for couples and $200,000 for singles. That will surely elicit howls from Obama’s critics on the left and the right, but it does recognize implicitly the budgetary need to raise taxes on more than just the top 2 percent of households.
Obama’s other bite on the rich is a Buffett Rule that would ensure that high-income households pay at least a minimum percentage of their income in taxes. Until now, the president has only spoken aspirationally about this idea. But his budget includes a concrete plan, dubbed the Fair Share Tax, or FST, that would collect $53 billion over ten years (and $99 billion if Congress doesn’t raise taxes on the rich with the 28 percent cap).
Obama’s goal is to keep the rich from taking advantage of tax preferences that allow them to pay low effective tax rates. Billionaire Warren Buffett raised this issue with stories about his secretary paying a higher tax rate than he does, and it resurfaced during the 2012 presidential campaign amid complaints about Mitt Romney’s 13 percent effective income tax rate.
But it turns out that setting a floor on the taxes rich people pay is not so easy. It is complicated and messy, and might not even accomplish its intended goal.
The FST would be a new minimum tax that requires rich taxpayers to pay at least 30 percent of their adjusted gross income (AGI) in federal taxes, with the rule phasing in between $1 million and $2 million of AGI (indexed for inflation).
But it would have exceptions. To protect charitable contributions, affected taxpayers could claim a credit equal to 28 percent of their deductible gifts. They could also count any alternative minimum tax liability, the 3.8 percent Obamacare tax on investment income, and the employee share of payroll taxes toward the 30 percent minimum tax.
And there are at least two other problems. First, the rich—particularly those who benefit from reduced tax rates on dividend and capital gains income—pay a disproportionate share of the corporate income tax, which is not included in the Buffett Rule calculation. TPC estimates that the corporate tax boosts the effective tax rate of the highest-income 1 percent by 7.5 percentage points, more than five times the rate for the bottom 90 percent. Excluding that tax understates the taxes the rich already pay.
But worse, the FST would be a new alternative tax with all of the problems of the one we have now. If the president does not like the fact that certain tax preferences allow rich people to pay less tax, he should reform the preferences, not layer on another tax of people who use them. That not only complicates the tax code but also makes the whole system less transparent.
We can disagree about whether Congress should raise more revenue and, if so, whether it should do so by raising taxes on the rich. But even if you think the answer to both question is yes, adding another minimum tax is not the way to do it.