Posted on 12/06/2005 8:11:00 AM PST by george76
More than 17 million individuals and families could start the new year facing higher taxes because of a provision unfamiliar to most taxpayers -- the alternative minimum tax.
The new year means the expiration of a temporary fix that prevents the alternative minimum tax from hitting millions of people this year on taxes due next April.
But if Congress doesn't act, the additional tax will return for the 2006 tax year.
Originally designed to make sure wealthy individuals paid some tax, the alternative minimum tax reaches further into the middle class every year as inflation pushes more and more people into its grasp.
Congress regularly erects temporary dams to prevent the tax from trapping the middle class, and lawmakers are making a last-minute effort to keep that dam in place next year.
without any congressional action, the alternative minimum tax will hit 19 million taxpayers next year,...
That would include almost three out of four married, two-child couples whose incomes fall roughly between $75,000 and $100,000...
"It's a horrible tax. It's economically inefficient, it's unfair and it's mind-bogglingly complex. ...
unnecessarily complicated, unfair and unpredictable...
"The alternative minimum tax is a vivid example of why our tax code is dysfunctional," ...
the alternative minimum tax could impose a tax increase as large as $3,640 on some families next year.
Many common deductions don't count under the alternative minimum tax, including those for state and local income, property and sales taxes, and couples face a steep marriage penalty.
(Excerpt) Read more at foxnews.com ...
You clearly live in a fantasy world.
Certainly there are families in those areas living on much less, but they generally live in extremely cramped quarters in dangerous neighborhoods (with rent controlled apartments subsidized by higher income people), send their children to dangerous public schools where little real education goes on, and can only dream of such luxuries as owning (or even renting) a few square feet of land where they could plant a few flowers. To take an example of a working class couple I know who lived in Brooklyn (cheaper than Manhattan): about 10 years ago (so factor inflation into this) I happened to know what both of them earned, he's a trash collector and then made about $60K, she's a secretary and then made about 75K. They live in a rented 2-bedroom apartment which is one floor of a 3 floor/3 family house, have one not-too-recent car, and their son attends public school. That's the lifestyle about$160-170K would buy now. No, they're not starving, but they're not living nearly as well as a family of three could live on $40,000 in most parts of the country -- and they're in alternative minimum tax income range.
#4 IRS Engaging in Massive Crackdown -- Now Collecting Your Credit Card Records and Worse
If you thought the IRS might be neutered with the Clintons out, think again.
Already Judicial Watch's Larry Klayman has issued statement after statement criticizing the Bush Administration for not replacing Clinton-appointed IRS Commissioner Charles Rossotti.
Rossotti's IRS, under direction from the Clinton White House, engaged in IRS audits of every major conservative group that criticized Bill Clinton. Judicial Watch is also under an IRS audit.
But new actions show the IRS is completely out of control.
Commissioner Rossotti is increasing IRS audits of U.S. citizens by instituting his "National Research Program."
The program kicks out any taxpayer's filing if the figure in a single line of their return is above the average for Americans. One report suggests the new system will increase audits by 25% or more.
The IRS is also becoming a global police agency.
It has demanded -- and received -- more than 1.7 million cardholder records from American Express and Mastercard.
They are combing the records of U.S. citizens who have cards affiliated with offshore banks. Recently, the IRS asked Visa to turn over their records. [Note: It is not illegal for U.S. citizens to have an offshore credit card.]
If you thought these items were bad, consider how the IRS is interpreting the US Patriot Act.
New regulations by the Treasury Dept. now demand that credit card companies, mutual fund brokers, commodity dealers and wire transfer firms like Western Union, begin filling out "suspicious activity reports" on their customers.
This KGB-style program is apparently not enough for the IRS.
NewsMax hears from Washington insiders the IRS wants to expand these informant reports of "suspicious activity" and to have them filed regularly by travel agents, hedge fund managers, auto dealers, boat dealers and jewelry and metal dealers.
We think Larry Klayman has a point.
* _ * _ * _ * _ * _ * _ * _
The "someone has something that I don't have" mentality is and continues to be a big problem in the U.S.
I must admit that I'm ignorant as to how the AMT works. What is it based on; number of children and income? If so, the MORE children you have, the more likely you are to be socked with the AMT?
I agree taxes should be uniformly lower across the board.
The way the AMT works, by comparing a total of deductions (many of which have already been partially phased out due to income level) with the AGI, is just bizarre.
If an AMT was doing what it was supposed to do -- ie, making sure EVERYBODY pays at least SOME income tax -- then I think a much fairer method would have been this:
Every pays 5% of ALL INCOME, with no deductions and no exemptions except for SS/Disability income. Lower the tax rate on all the "brackets" by 5% at the same time.
That AMT would raise $500B/yr -- more than half of the total Individual Income taxes currently paid.
Of course, the the goal of the AMT is not, and has never been, to ensure that EVERYBODY pays at least some taxes. It has always been intended to punish the wealthy for their success. The Socialists could never get their pet nanny-state programs adopted if their voters weren't getting a free ride from the existing income tax.
Even making them contribute 5% of their income to supporting the country would make a huge change in their voting habits.
The Republicrats are loathe to give up the revenue. Need to buy those votes, you know.
FYI, I just checked the current figures for what our great welfare state offers to young single women to encourage them to become young single mothers.
Income Tax Deduction = $3,200 per child x 10% tax rate = $320/yr
Child Tax Credit = $1,000/yr
EITC (for $15,000 income) = $2,662/yr
Food Stamp benefit = $2,292/yr
Total incentive for a single working mother to have a kid = $6,274.
There are probably dozens of other welfare programs that would add to this "encouragement."
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