Posted on 03/18/2004 10:16:47 AM PST by ancient_geezer
Newsday
WASHINGTON — The nation's top tax collector is the latest victim of the alternative minimum tax.
While most Americans are still working through the details of their W-2s and 1040s, Internal Revenue Service Commissioner Mark Everson said last week he has finished his calculations and filed his return. But to his surprise, Everson has been forced to pay the alternative minimum tax, called AMT, for the first time.
Enacted by Congress in 1970 to corral 155 wealthy tax dodgers, the AMT evolved into a parallel structure that sets 26 percent and 28 percent tax rates that are pegged to income.
New Yorkers are particularly vulnerable to the AMT because of high state income taxes, local property taxes and, in the five boroughs, city income taxes. These can be deducted from total income on the traditional tax return but are pre-empted if the traditional tax liability falls below the AMT.
Since 2001, the number of taxpayers paying the AMT has more than doubled from 1.1 million to 2.4 million. It is projected to rise to 44 million over the next decade.
But fixing it is costly. The Bush administration has proposed a one-year, $7 billion patch by exempting households earning less than $58,000.
But the Tax Policy Center, a research center operated by the Urban Institute and Brookings Institution, estimates that over the next decade, correcting the AMT would cost the government $650 billion in uncollected revenues.
Everson says if the process isn't simplified, people will be less willing to pay taxes.
"It's a matter of simplifying a tax system that's far too complex," Everson said. "It's got to be addressed."
"It's a matter of simplifying a tax system that's far too complex," Everson said. "It's got to be addressed."
Time to clear the slate and start over in my view.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
If you would like to be added to this ping list let me know.
Liberal 'logic': Uncollected taxes = government costs.
We're doomed.
It is confiscation, not "revenues." Bastards.
With the AMT in place, the rich got no tax cut Sen. Kerry.
And never will as long as half the voting population pays little or no federal income tax.
The Honorable James DeMint (R-SC)
United States House of Representatives
THURSDAY, APRIL 5, 2001
- "There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government.
To remove perception of the tax burdens of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high and government grows ever larger because a majority of the electorate do not perceive proportionately the burden their demand for largesse imposes on the minority of citizens.
The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.
Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.
Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout)
| Effective Individual Federal Income Tax Rate (Percent of gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Lowest Quintile | -0.6 | -0.8 | -0.2 | -0.5 | -0.2 | -1.3 | -1.9 | -2.9 | -3.4 | -5.6 | -6.8 |
| Second Quintile | 3.6 | 3.9 | 4.6 | 3.5 | 3.9 | 3.2 | 3.3 | 2.7 | 1.8 | 1.8 | 0.9 |
| Middle Quintile | 7.1 | 7.5 | 8.3 | 6.8 | 6.8 | 6.1 | 6.5 | 6.3 | 5.9 | 6.1 | 5.4 |
| Fourth Quintile | 9.7 | 10.4 | 11.3 | 9.5 | 9.3 | 8.7 | 8.9 | 8.7 | 8.5 | 8.7 | 8.4 |
| Highest Quintile | 15.8 | 16.3 | 17.1 | 14.5 | 14.3 | 15.1 | 15.1 | 14.8 | 15.5 | 16.2 | 16.1 |
Note that 70% of the voting public clamor for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC, and transfering additional burdens to the upper 40% through the AMT.
The Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
-- a free people that pays slave taxes to its government is willingly training itself for bondage.
Alan Keyes 1999
There's two problems. The first is that the AMT, while essentially a nearly flat rate tax for the moderately well-to-do and above, is only paid after you've calculated your regular tax in all of its hideous complexity. The second problem is that the government is involved in too large a portion of the economy.
The first problem is insulting, and frustrating, and can be addressed by tax reform. However...
Neither tax reform, nor a national sales tax, nor a VAT will fix the second problem, which I think is more fundamental. Adding a sales tax, or a wealth tax, or a value added tax, or replacing the income tax with some combination of those, doesn't solve the fundamental problem that the government needs to raise a lot of money for its public services, works, and transfer payments. In the absence of a change in the ever-upward trend of government economic involvement, there would still be complaints that sales taxes were too high; that the poor or elderly needed some form of wealth or income exemption, and that there was a lot of cheating.
In the absence of a change in the ever-upward trend of government economic involvement, there would still be complaints that sales taxes were too high;
Only people who complain of high taxes are the few that have to pay them. See reply #7 above.
The others, the 70% of the voting public clamor for more from government looking for the top 40% of income earners/producers to foot the bill.
that the poor or elderly needed some form of wealth or income exemption,
Everyone needs that, up to a the level of necessity. Whoever, that does not mean that those persons cannot participate and be made aware of the burdens largess imposes.
A retail sales tax puts the perception of the burden on everyone, exempting none. Yet can be structured with prepayment of taxation for the povertylevel of expenditure. Paid to each and every legal resident, it provides relief without bringing in the spector of lobbiests and Congress Critters picking the bones of what gets exempted from taxation and not.
The second problem is that the government is involved in too large a portion of the economy. *** Neither tax reform, nor a national sales tax, nor a VAT will fix the second problem
A Retail Sales tax however, does provide full visibility of the burden of large government throughout all sectors of the electorate. That is one factor missing from the current tax system, that of visibility of the burden, where it matters, among those that demand the largess.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
The structure of the graduated income tax panders to that maxim creating the perception of the free lunch.
Walter Williams, World Net Daily, 10-25-2000 hit the nail on the head:
So many Americans paying little or no federal taxes makes for a natural spending constituency. It's like me in the restaurant: What do I care about extravagance if you're footing the bill?
Where the reality is that we indeed all pay not through the Individual Income tax which gets all the notice but through the embedding of taxation and its high costs of compliance into prices of our goods and services.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes) added onto the base(taxfree) price of retail consumption goods and services is 36%, (i.e. 26% of total consumption expenditure) for federal taxes alone.
History of the income tax has clearly demonstrated that when people do not perceive the burdens laid on them, they aren't going to demand smaller government.
It's long past time to change the paradigm.
Even if I'm not convinced that the sales tax is the way to go in the absence of governmental spending restraint while you argue it would help create it, we agree on a lot and you've made a number of good points. Perhaps the quote above is the best.
Along these lines, I've thought that wage with-holding is a bad idea, and have suggested that it be eliminated. Everyone gets their full wage, and then gets to write a check to the government for the taxes, either monthly, quarterly or yearly. That would have a similar effect.
Along these lines, I've thought that wage with-holding is a bad idea, and have suggested that it be eliminated.
Problem is that only reaches the choir, the ones that have tax due under the income tax and are well aware of it today.
The spending constituencies have nothing to be withheld to begin with and many end up with a check besides at 1040 time, the average income tax for the bottom 3 quintiles is less than 0%:
| Effective Individual Federal Income Tax Rate (Percent of gross income) | |||||||||||
| Income Category | 1977 | 1979 | 1981 | 1983 | 1985 | 1987 | 1989 | 1991 | 1993 | 1995 | Projected 1999 |
| Lowest Quintile | -0.6 | -0.8 | -0.2 | -0.5 | -0.2 | -1.3 | -1.9 | -2.9 | -3.4 | -5.6 | -6.8 |
| Second Quintile | 3.6 | 3.9 | 4.6 | 3.5 | 3.9 | 3.2 | 3.3 | 2.7 | 1.8 | 1.8 | 0.9 |
| Middle Quintile | 7.1 | 7.5 | 8.3 | 6.8 | 6.8 | 6.1 | 6.5 | 6.3 | 5.9 | 6.1 | 5.4 |
| Fourth Quintile | 9.7 | 10.4 | 11.3 | 9.5 | 9.3 | 8.7 | 8.9 | 8.7 | 8.5 | 8.7 | 8.4 |
| Highest Quintile | 15.8 | 16.3 | 17.1 | 14.5 | 14.3 | 15.1 | 15.1 | 14.8 | 15.5 | 16.2 | 16.1 |
Yearly. Put the collection box right in front of the voting booth.
Is there something you missed? Perhaps the prepaid child tax credit(s)?
Did you know that if your combined income (married filing joint) is less than a certain amount you can claim a percentage of your 401k donations? We made less than 50k this year and got 10% of my 401k donation as a direct reduction in taxes (not taxable income, but tax itself).
What I want to know is why is the check I'm writing to the IRS this year 400% larger than it was last year
Congress, is where the law get's made. You want change? Change Congress Critter's for those that will make the change, that is what it is going to take.
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