At 2 p.m. today, Rep. Richard Neal (D-MA), chair of the House Ways and Means Suncommittee on Select Revenue Measures, holds the first hearing (webcast here) of the 110th Congress on AMT reform, meaning repeal. Currently, the debate about how to keep AMT liability from engulfing the middle class seems to vaccilate between between:

• the temporary solution -- the hold-harmless-via-patches strategy favored by leading Senate Democrats, who have endorsed a $115 billion, two-year patch for 2007 and 2008
• the permanent solution -- full repeal, supported by Neal, Ways and Means chair Charles Rangel (D-NY), Sen. Charles Grassley (R-IA), and the Bush administration, at a (possibly un-offset) 10-year cost of about $1 trillion

But this has been a limited debate with little serious about permanent AMT reform short of repeal, a theme we've sounded. Here are two general approaches that would re-direct the debate toward efficiency and the equity issues:

• increasing, capping, and indexing the current exemption levels (part of an intriguing solution offered by Citizens for Tax Justice) to address the inefficency of patches: roughly 25 percent of the current 2007 patch benefits households with over $100,000 in annual income
• allowing AMT taxpayers to re-claim a regular income tax deduction to restore equity and remove arbitary penalties, such as state and local taxes deduction or the dependents exemption. For costs of making each of the major deductions available to AMT payers, see this Tax Policy Center table.

At today's hearing, we'll be watching out for fiscally responsible, targeted, prgressive solutions ensuring that the very rich pay a reasonable amount in taxes and that the middle class bears no additional tax burden.