Study Says Middle Class to Lose Much of Bush Tax Cut's Benefit
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WASHINGTON, Sept. 18 — Nearly all middle- and upper-middle-class families will lose some of the income tax cuts scheduled over the next eight years as they are forced to pay a separate tax originally intended to make sure that the rich cannot live tax-free, a study released today found.

By the end of the decade, when the tax cuts pushed into law by the Bush administration in 2001 become fully effective, 85 percent of taxpayers with two or more children will be forced off the regular income tax and onto a separate system known as the alternative minimum tax.

The additional burden will fall largely on families with incomes of $75,000 to $500,000. Just three years ago fewer than one million taxpayers, most at the upper reaches of the income spectrum, were subject to the complex separate tax. But if nothing is changed, by 2010 about 36 million taxpayers will face it. Indeed, virtually all taxpayers earning $100,000 to $500,000 will fall under its sway.

"What was a class tax is becoming a mass tax," said Len Burman of the Urban Institute, one of the study's authors and a tax expert under former Presidents Ronald Reagan and Bill Clinton.

Under the alternative minimum tax system, many deductions are denied, including those for children, the taxpayers themselves and for state and local taxes. At that point, taxes are calculated at rates of 26 to 35 percent.

"We're talking about a really nasty marriage penalty," Mr. Burman said. "You are 25 times to 30 times more likely to be on the alternative minimum tax if you are married rather than single."