AMT, Tax Gap Called Gravest Tax Problems

Washington Post ^ | 9 Jan 07 | Jim Abrams

[xzins]

The Alternative Minimum Tax, since it is not indexed to inflation, will eventually cover every taxpayer.

Wouldn't that be a backdoor way to institute a flat tax of about 27% (roughly the AMT rate.)

[goldstategop]

The Democrats love higher taxes. I predict nothing will be done about the AMT since this would starve government and as every one knows, government can never do with less.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Sidebar Moderator]

Washington Post material must be excerpted.

[xzins]

Using the average rate of inflation and standard growth of economy and incomes, it should be possible to plot when the AMT will cover every single American, even those on welfare.

It's sort of humorous (although pretty far in the future) to think that the vaunted graduated income tax has an inbuilt feature that brings everyone under the same percentage.

[dirtboy]

The Democrats love higher taxes. I predict nothing will be done about the AMT since this would starve government and as every one knows, government can never do with less.

The Democrats will sell AMT revisions in two steps, IMO - shift the AMT threshhold back up to about $150K a year or so, and raise the AMT base rate up to about 30 percent.

[xzins]

I didn't get it from the Washington Post.

Earthlink is running it thus:

AMT, Tax Gap Called Gravest Tax Problems
By JIM ABRAMS (Associated Press Writer)
From Associated Press
January 09, 2007 12:50 PM EST

[xzins]

I also don't know how the WaPo link got there:

I posted with: http://enews.earthlink.net/article/pol?guid=20070109/45a32150_3ca6_1552620070109655067283

[doc30]

But repealing the law, under which taxpayers reaching a certain income level lose dependent or state and local tax exemptions, could cost up to $1 trillion over the next decade. There's no consensus on how to make up for the lost revenues.

That's what I don't like. The government is already forecasting its revenue by including the expected effects of the AMT. And now, the dems complain that eliminating, or scaling back the AMT to its intended purpose, will cause a loss of revenue. The government should not be projecting the economic cannibalistic effects the AMT will have as something that needs to be made up for if lost. How much of Clinton's so called budget surplus was actually forecassts that has the AMT as a significant component?

[xzins]

My guess is that every forecast includes the AMT as part of the number crunching.

If we had a pure flat tax what percentage would you think it would have to be to fund our hungry government?

[goldstategop]

Government consumes; it produces nothing of value.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[cinives]

Yeah, but you'll still have to waste many hours and fill out the %$#@$# tax form.

[D-Chivas]

Chuck Grassley had 12 years to fix it. He didn't.

[xzins]

The republicans worked hard to get back into the minority, but they finally achieved it.

There's no responsibility; just the right to complain and say things like, "When the Republicans are in power...."

[GSlob]

Not every taxpayer, but many more than now. If one does not have too much in tax preference items, then one could escape even non-indexed AMT forever. That requires, for example, not having mortgage interest to pay, and to deduct.

[Sidebar Moderator]

You posted without a link, so I found one.

[Kokojmudd]

The Democrats will sell AMT revisions in two steps, IMO - shift the AMT threshhold back up to about $150K a year or so, and raise the AMT base rate up to about 30 percent.

And if they do the president will probably sign it. Too bad the republicans could do nothing to end this abomination.

[xzins]

That's odd.

I hit the post button but noticed I'd left my link off nearly immediately, so I stopped it, added the link and hit the post again. I got some message that said, "temporarily unavailable."

Looks like I screwed it up. :>)

Sorry to be a pain.

[dfwgator]

I had to pay AMT last year, and I was pissed off!

Just remember everything that is meant to soak the rich, ultimately ends up soaking the middle class.

[Jimmy Valentine's brother]

Yes, the AMT was meant to tax those collecting tax free interest on municipal bonds. Once again the "rich" were the only ones who were going to have to pay. Just like the telephone tax for the Spanish American War and the Income tax covered by the 16th Amendment.

[Beagle8U]

"Just remember everything that is meant to soak the rich, ultimately ends up soaking the middle class."

Thats only fair. The middle class are rich./ sarc.