Posted on 05/24/2005 8:17:17 AM PDT by SmithL
A Senate Finance subcommittee opened hearings on the alternative minimum tax Monday, and they didn't start a day too soon for people in California, who pay a disproportionately large share of this creeping crud.
In 2003, Californians filed 11.6 percent of all individual tax returns, but filed 20.1 percent of alternative minimum tax returns and paid a whopping 22.8 percent of the nation's entire alternative minimum tax, according to preliminary figures from the Internal Revenue Service.
Three of the big things that can throw a household into the alternative minimum tax are high state and local taxes, large families and certain types of stock options. California has all three, in spades.
The alternative minimum tax is a separate tax system that was designed to make sure wealthy families couldn't use exotic shelters to eliminate their tax bills. Most of those shelters were shut down in the 1960s and 1970s.
"Today, the AMT affects millions of taxpayers with no tax-avoidance motives at all -- unless one considers choosing to live in a high-tax state or choosing to have children to be a tax-avoidance motive," Nina Olson, who heads the IRS' Taxpayer Advocate Service, told the Senate subcommittee.
Olson said in her prepared statements that if she could make "just one change to the Internal Revenue Code, I would use it to eliminate the individual AMT."
(Excerpt) Read more at sfgate.com ...
Indexing it to inflation would be my second choice.
Retroactive as well as future indexing, I would hope.
Indexing would be OK, so long as it is indexed to its inception when it affected only a few, and not to now, when the non-indexed horse is already out of the barn.
We had the same thought but you said it with less words!
Sounds to me exactly like avoiders were nailed and want to weasel out. I hope I'm wrong, but have no way of telling.
Putting on flame proof suit - AMT does not impact "Sex and the City" types of all sexual orientations who either rent or own small places in places like San Francisco. People who live in Bush Country portions of California need to get in a rage about AMT and all other artifacts of liberalism (aka a mental disorder).
How about the fact that since it's not indexed for inflation, it's making an ever larger percentage of taxpayers pay higher taxes than those legislated for their income and circumstances? Just the fact that having a lot of kids can trigger it should tell you enough, unless you view kids as a tax dodge.
Agree with you there...the AMT is liberalism at its worst.
The AMT is the democrats wet dream. Tax large families and disallow deductions for state and local taxes, plus a higher tax rate no index to inflation is what the dems love. I bet they would love to see the AMT be mandatory for everyone, except women and minorities, of course.
I would either eliminate withholding, forcing people to write checks to the government every paycheck, or move tax filing day to the day before elections, such that taxes are still fresh in their minds when they vote, instead of half a year away either way.
(But, really, I'd abolish the income tax altogether. This country somehow managed to survive 150 years without it.)
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