Posted on 11/08/2005 9:01:50 AM PST by SirLinksalot
Ending AMT not worth tradeoff Peter A. Brown
Ideas that are attractive on paper sometimes turn out not to be worth the risks in the real world. That's because the premise on which the proposals are based is badly flawed.
That's the case with the recommendations of the president's tax-reform panel. In its obsession to eliminate the alternative minimum tax, it has come up with some very questionable tradeoffs.
The suggested changes, if implemented as a unit, might well be good for the country.
After all, who doesn't favor a simpler, fairer tax system that provides the right incentives for economic growth? And the suggested changes, in isolation, might accomplish those ends.
As always, though, the devil is in the details. As Hillary Clinton found out a decade ago with health care, when reform starts from scratch, change brings very real risks.
The tax panel began its work with a predisposition to eliminate the AMT. To accomplish that goal, however, the panel had to find ways to raise the $1.2 trillion over the next decade that the AMT would bring the federal Treasury.
The key question is whether the tax panel's proposals to make up that shortfall are better for taxpayers and the economy than leaving the AMT, as onerous as it is to some, in place.
The simple truth is that even if the tax changes were to raise exactly the same amount of revenue that the AMT now does nationally -- and don't blame me if I am skeptical that would occur -- the panel's plan would hurt an awful lot of Americans.
These are middle-class people who have made their individual economic plans based on the current deductibility of their home mortgage, state and local taxes and health-insurance premiums.
(Excerpt) Read more at orlandosentinel.com ...
Here's their problem. After all the proof to the contrary, they insist on acting as if lower tax rates produce lower tax revenue. IT'S A LIE!
And anyway, the goal should be to reduce the amount of tax revenue, not hold it constant or increase it. Take the money AWAY from the government!
The Anti-Millionaires Tax should go the way of the other slavery rules.........
I support the elimination of the IRS in the implementation of the Fair Tax. The current income tax scheme is not Constitutional and is inherently anti-American. It's pure evil, Marxism.
I have been screwed by the AMT more times than I care to remember. I wish that it would just go away.
I am always skeptical when it comes to these panals. Unless they come with a flat tax, as you mentioned, all I suspect is that they will come up with a new way of screwing the working class while rewarding those who can afford tax lawyers and having the money for programs to pay off the terminally lazy and unproductive. I fail to see what is so difficult that they cannot recognize that the Kiss "keep it simple stupid" philosophy IS the fairest way to go with regards to taxes. Once you clear away the smoke and remove the mirrors of their proposals we will STILL be getting it in the end.
We got hit with it one year, too. We had too many children, and too much charitable contribution.
I have book shelves full of tax simplification acts (read tax increases). What's in a name? Lies, damn lies.
We will always be slaves until they do away with the tax filing of income.
Why not convert the alternative minimum tax into the flat tax? Anyone who still wants to pay under the old system would be allowed to, but most people would prefer the new one.
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Why not convert the alternative minimum tax into the flat tax? Anyone who still wants to pay under the old system would be allowed to, but most people would prefer the new one.
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I have an even better proposal which is really PRO-CHOICE ( conservatives are mostly pro-choice except when it comes to taking the lives of innocent babies ).
Why not change our tax code so that people have the CHOICE to file the flat tax way VS the traditional way.
Lets see which way becomes more popular. I believe that in the long run --- the traditional way will ( to use Newt Gingrich's words ) WHITHER IN THE VINE and die.
THIS WILL BE THE ULTIMATE REFERENDUM.
If Republicans are bold, they will make this -- CHOICE a centerpiece of their tax proposal. Lets see what the Dems have to say as a counter to this VERRRY Pro-Choice plan.
Any revenue-neutral simplification of the tax code will benefit some and hurt others.
It's simple logic -- and an excuse to scaremonger and scuttle any revenue-neutral reform of any time.
These are middle-class people who have made their individual economic plans based on the current deductibility of their home mortgage, state and local taxes and health-insurance premiums.
I am one of these people, and I've already done the math. The elimination of the home mortgage interest deduction alone will lead me to pay at least $3000 in additional federal taxes alone. I simply can't afford to continue owning my home if this change goes through. I will lose my home, because I will lose a huge chunk of my net income. Speaking purely out of self-interest, I've never been subject to the AMT (one year I came close, but I dodged it), so why should homeowners like me have to suffer?
On the broader scale, IMO eliminating the interest deduction will lead to catastrophic changes for home builders, realtors and lenders as buying habits adjust to the new fiscal reality. Anyone old enough to remember the elimination of the home investor's interest deduction impacted the investor community back in the late 80s? IMO that led to the collapse of the savings & loan industry.
They've, um, tried, you could say. It just didn't work very well. Ted Stevens threatened to resign if they touched his Bridge to Nowhere, doncha know. They're struggling to pay for $50B new Katrina spending with cuts in other areas. The only thing that's keeping the budget from growing at double the pace it is now is Bush's tax cuts and the modest political price for deficit spending.
That should be offset by the mortgate interest tax credit.
Don't we wish that were true. Many of us are looking at large tax increases if either of these plans goes through. I'll have to cut investments by $4000 per year to pay for those tax increases.
Yeah, great plan guys....
And you aren't going to be hit by the AMT???
Nope, at least not yet... I've run the numbers time and again, and I'm paying a good couple thousand in federal income taxes above the amount that would require me to fill out form 6251. The odds are that I would have to see my AGI increase 40% or so before AMT comes around. By then my deductions will have dropped (much lower interest payments to deduct), so even then AMT may not be an issue.
You said it! This article seems to pretend that the government is a business, wherein if it doesnt make more than it did last year, someone going to be mad. Well, dont hold your breath, because its NOT going to be me, anyway!
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