Facile Assumptions

The assumption has been that under the new Obama budget, households with incomes in the $200k-$400k range will take a big hit. As a New York Times analysis (and I know conservatives will stop reading at this point because it is the NYT, but I read the WSJ and will give it credence when its statements are buttressed with facts and hopefully the same tolerance will be applied reciprocally), while their tax bills will be pushed up, in many cases it will not be enough to get them out of the AMT range, i.e., their AMT liability would still exceed their normal tax liability and they would have to pay the AMT. The people who bear the brunt of the new tax regime will be people who work for hedge funds and private equity firms and were previously taxed at 15% and those with an income/deduction mix that would be pushed out of the AMT range, i.e., their regular tax liability is higher than their AMT liability. So it is hard to apply general assumptions across the board as to the impact of this plan.