A nasty surprise awaits the middle class come tax day

Seattle Post-Intelligencer ^ | January 31, 2004

[sarcasm]

Beware: The alternative minimum tax could soon snag you.

The minimum tax, enacted to make sure that even the ultra-rich pay some income taxes, may hit 44 million households, including families making less than $50,000 a year simply because they have lots of children to claim as exemptions or take other tax breaks.

The non-partisan, private Tax Policy Center estimates the tax will:

• Add an average of $3,751 annually to a tax bill, with 52 percent of affected households making $100,000 or less a year.

• Let many ultra-wealthy people off the hook again: Only 24.3 percent of people making over $1 million will pay the tax by 2010.

Congress enacted the tax in 1969 amid reports that 155 ultra-rich Americans avoided paying a penny in income tax. The alternative tax has been on the books since then, never indexed to inflation.

The tax breaks President Bush and Congress enacted since 2001 expanding child tax credits and "marriage penalty" relief make it more likely taxpayers will owe the alternative minimum tax.

Bush called for permanent extension of these tax breaks in his State of the Union address but not reform of the alternative minimum tax, which denies families most of the Bush write-offs. The 2003 tax cut contains a temporary provision that will help many families avoid the alternative minimum tax through 2004. But repealing the tax entirely would cost the Treasury $600 billion in the next 10 years.

And there's insult to the injury, the IRS says:

• Taxpayers who might owe the alternate minimum will spend 12 hours more preparing their 2003 taxes. They will have to calculate taxes under two formulas requiring eight pages of instructions, a 12-line worksheet and a 65-line form.

• And when they're done, they must pay the higher amount. Many won't owe the alternate minimum tax -- but they'll still have lost a day figuring that out.

[Arkinsaw]

You seem to be agitated about some anti-family sentiments that the poster never intended. Again, the argument is very much larger.

Okay then: Conservatives do not complain about CITIZENS paying "too few" taxes. Better?

[Arkinsaw]

Not agreeing with an element of the tax code has nothing to do with how conservative I am.

We are not talking about details here, we are talking about whether someone not paying as much of THEIR MONEY to the federal government harms you. Believing that others need to pay more taxes to benefit YOU is against FUNDAMENTAL conservative philosophy and is not a detail of the tax code.

[LoudRepublicangirl]

Well said.

[americanbychoice]

That's ludicrous. There are several ways to look at it.
Suppose you pay that money into a bank. Both people would have the same principal, wouldn't they?
If you look at the living standard each person receiving the same, it would measure up to 1/100 of the money. Which is fair? could it be both?
You may want to go to that liberal haven of the EU. Everything is "fair" there. You pay heavily into it and you get the same amount of benefit everyone else does. I guess that's fair.

[leadpenny]

Social Security is just that . . . a socialist program. At least it is for some. If you are fortunate enough to make more than an arbtrary cap then you are above the rest of us forced socialist. Of course the whole program should be scrapped but until it is (which ain't anytime soon) then we ALL should be forced socialists. If I have to run with 12.4 pound weights on my legs, you should too.

There is no cap on Medicare. Remove the cap on FICA!

[americanbychoice]

well, given your arguments, is it fair that the ficticious 8 million dollar person should pay 100 times as much into a medical plan than the 80K person?

[leadpenny]

I don't like it either, but it's a socialist program, isn't it?

[leadpenny]

Oh, you were talking Medicare. Yes, in fact the 8 million dollar man WOULD pay 100 times the 80 grand man. No cap!

[The Coopster]

Wow, you're just as abrasive as your namesake.

He/She was paying attention, as was I. The comment was about you flaming TBV about his comment regarding the time necessary for completing your taxes.

We have Quicken and TurboTax. Quicken is our checkbook register (which imports directly from my online banking), and it tracks everything. Turbo Tax then imports from Quicken.

All things not tracked specifically for tax purposes are taken care of by the forms you get after the end of every year (W-2, interest income, 1099, etc). With TT, it's just a matter of plugging that info in when asked.

We have a mortgage, 1099 income, daycare expenses, interest income satatements, and a few other sundry line items. Last year it took 1.5 hours to do my taxes, and that included the time to e-file.

If it takes a person 12 hours to do their taxes, they're doing it wrong. Either they aren't automated, or someone else needs to be doing them. Or both.

And 1 more thing. Just because someone doesn't agree with you 100 percent doesn't mean you need to be rude. Grownups can debate without debasing.

[americanbychoice]

Now for the big Question, Does he/she receive 100 times the benefits?
There will never be a magic solution. If we embrace the European style system of Medical coverage and Old age Benefits, we will all pay more and get less.
I have always been for a mandatory retirement contribution, invested like an IRA or 401K, where we have the choice.
A mandatory decreasing term policy to age 70 of 7 times income to protect the family in case of our death.
A mandatory Disability policy to age 70
All those are currently provided under soc.sec.
However, privatising and purchased on a group basis would be far better than our present system. It would provide much more coverage for everyone.

[JoeSchem]

Bush called for permanent extension of these tax breaks in his State of the Union address but not reform of the alternative minimum tax, which denies families most of the Bush write-offs.

Bush has a problem saying certain words, and I don't mean 'nuclear.' He can't say 'veto,' and he can't say 'illegal' in front of 'immigrant,' and now we learn he can't say 'alternative minimum tax.'

Basically, this tax nullifies the Bush tax cuts, and is an example of yet another Bush fraud to mislead conservatives -- unless you genuinely and truly believe in all your heart that the Bush economic team was totally blindsided by the existence of a tax that has been around since 1969.

When will you people wake up to the fact that this particular Texan is all hat and no cattle?

[patton]

I am not abrasive. Not at all.

[leadpenny]

True socialist would say "means test." Each according to his needs, or something like that. Maybe if everyone got on the socialism bandwagon, we could kill the sytem sooner. All ponzi schemes eventually fail . . . we could just help it along.

[sarcasm]

It took 111 posts for someone to notice.

[americanbychoice]

"We could help it along"
Yes, after a lot of money out of your pocket. :)

[rintense]

Finished my taxes in a few hours. Got more back this year than last.

[rolling_stone]

Well conservatives do complain about social engineering which is exactly what our present tax system does, giving deductions and credits to some but not all. It is unfair and based on Congress's or paid lobbyist's idea of what is fair and can be bought and paid for in money or votes.

[Arkinsaw]

Well conservatives do complain about social engineering which is exactly what our present tax system does, giving deductions and credits to some but not all. It is unfair and based on Congress's or paid lobbyist's idea of what is fair and can be bought and paid for in money or votes.

If you look at the thread, you will see that a poster complained about someone lowering their taxes by taking a deduction and stated that the reason for the complaint was that it would cost the poster more.

We do not complain about other people paying "too few" taxes and call ourselves conservatives. I am very sorry that this poster has to pay taxes. But the conservative solution to his problem is not to force someone else to pay more. The problem with the poster is that he does not want social engineering that saves SOMEBODY ELSE money. The poster wants social engineering that requires the other guy to pay more so he does not pay more. That is not a conservative tax philosophy.

I am in favor of EVERY citizen and EVERY group taking every single deduction that they are legally allowed and I advocate EVERY citizen and EVERY group demanding from Congress MORE deductions. There is not a soul in this country that I think pays too few taxes based on the amount of total revenue.

"The rich don't pay their fair share"....."Don't make me pay for your kids"....."How come I am single and the married people got a new tax break?"...."Why do I have to pay more than people with kids?"......etc. etc. etc.

This is what the liberals use to divide people and raise taxes. They play one group off against the other in the tax debates. The poster is playing right into that.

[HankReardon]

Good one! I honestly never realized that. I would have misspelled John Galt but that one was taken. Or, we are the Arabic Reardons, we have at least a dozen different spellings for our name.

[Allan]

Bump