Democrats have been flogging a plan to “fix” the Alternative Minimum Tax that has been ensnaring more and more non-rich taxpayers. Under the plan, put forth by the Tax Policy Center of the Brookings Institution and the Urban Institute, the AMT would be replaced with a surtax of 4% of adjusted gross income above $100,000 for singles and $200,000 for couples. That would amount to a huge marginal tax increase, but until recently, conservatives haven’t had a ready response for what to do instead.

All the better to see two alternatives taking shape. The first, offered by the Tax Foundation, would simplify the tax system along the lines of the Kemp-Roth tax act of 1981, lowering tax rates but expanding the tax base by eliminating some deductions. The Tax Foundation plan would increase the income levels at which the AMT kicks in to $300,000 for singles and $450,000 for couples and index them for inflation, alleviating concern about the need for another “fix” down the line. At the same time, it would cut tax rates, dropping the 10% rate to 8.5 %, the 15% rate to 13.5%, and the 25% rate to 24%.

Also, it would repeal the federal tax deductions for state and local taxes and the exemption for municipal bond interest. The Tax Foundation warns, “High-income, high-tax states are likely to object to the loss of the state-local tax deduction, but they will gain the most from the plan’s higher AMT exemption levels. They also benefit most from the Bush tax cuts.” In our view, an end to the deductibility of state and local taxes would help create pressure in New York for tax cuts at the state and local levels, which would be a welcome development.

A second alternative is backed by Senators Grassley, Kyl, Roberts, Crapo, and Smith, who are Republicans, and also by Senators Schumer, Lautenberg, and Baucus, who are Democrats. It would scrap the AMT altogether. A similar bill on the House side has backing from some of the most conservative Republicans in Congress but from not a single congressman from New York City, which is surprising given Senator Schumer’s co-sponsorship of the bill.

Mr. Baucus chairs the Finance Committee, of which Messrs. Grassley, Kyl, Roberts, Crapo, Schumer, and Smith are all members, suggesting that an outright AMT repeal, rather than a “fix” that involves a tax increase, could actually be in the offing. If Mr. Schumer manages to get this done, it’d take one of the worst taxes we have and put a dagger right through it. And we would be happy to be the first to give him a cheer.