The president’s tax-reform panel has good news for bond investors: it wants the Alternative Minimum Tax (AMT) eliminated. The bad news is that it probably won’t happen anytime soon.
After nine months of deliberation, the panel submitted its recommendations to the Treasury Department. The 272-page report outlines two alternative plans. One is a modified or streamlined version of the current tax code, named the “Simplified Income Tax Plan.” The other proposal, called the “Growth and Investment Plan,” takes more of a consumption-tax approach.
The good news for bond investors is that both plans would repeal the AMT.
Although the panel’s proposals will likely shape tax-reform discussions in coming years, neither is expected to become law anytime soon.
Sen. Charles Grassley (R-Iowa) and Rep. Bill Thomas (R-California), chairmen of the tax-writing committees in Congress, said they will hold hearings on the panel’s report but could not endorse its proposals in their current form.
Because of the importance of the AMT to municipal bond investors, we will continue to provide updates on tax-reform efforts.
