The AMT has provided cover for sleazy tax policy ever since it was enacted. It works like this: a politician promises a tax benefit. The tax benefit is written so that it doesn't work for AMT....Read the whole thing, including Joe's assurance that they can't repeal the AMT. Yeah, I pretty much knew that. So, go ahead, accuse me of writing "Why I love the new Democratic Congress!" just so I could condemn the Democratic Congress when they break their vow.
The politician gets to brag about a brave new loophole, and the taxpayers think he's a great guy, or gal. Then they complain about how that darn AMT got them. It's the ultimate bait-and-switch of tax policy.
This trick has been part of every major tax break in the last 20 years, and many of the minor ones. Perhaps the biggest example is the 2001 Bush tax cuts...
ADDED: Here's a NYT op-ed from 2005 about TurboTax and the AMT:
In a world without paid preparers and TurboTax, taxpayers would face the tedious process of calculating their taxes twice - once under the regular income tax and once using the cumbersome alternative minimum tax rules. But software does that calculation in the blink of an eye - and for taxpayers who have to pay the tax, tell them how to adjust their withholding so that next year they won't even notice that they're paying it....
We have created a vicious cycle. Congress has made taxes increasingly complicated and burdensome over the years. To cope, taxpayers have sought help from tax preparers and computer software. But that consumer convenience has bred inertia, shielding bad policy from the wrath of taxpayers who bear the burden of it.
AND: Here's an old post of mine, from 2005, before I started using TurboTax:
[It took me 20 minutes to figure] out my AMT, and Turbotax would have spared me from having to feel very bad about this, I suppose. I feel bad about the federal tax for having the AMT and bad about the state taxes for being so high in the first place and for being the reason I owe so much on the AMT.
Rationally, I admit that it isn't fair for people in states that charge high taxes to get away with contributing less to the federal effort. Why should people in low-taxing states, deprived of the benefits of the local services more taxes would fund, have to pay a larger portion of the costs of the federal government?
Rationally, I know my real problem should be with the state taxes, yet the feds are irking me with their complicated forms. In which case, I really ought to use Turbotax, not only to avoid the aggravation of witnessing the AMT grinding out the extra thousands, but so that I won't irrationally blame the federal government for doing something that is actually fair. Or am I losing my mind?