Rein in the Alternative Minimum Tax

Rocky Mt. News ^ | January 2, 2006 | editorial

[george76]

One of Congress' first orders of business this year ought to be an issue that was on last year's agenda and should have been addressed at that time.

On second thought, it should have been addressed many years ago, as soon as politicians realized that it was a growing problem...

The Alternative Minimum Tax, which could belt as many as 17 million additional taxpayers with sharply higher levies in 2006 - several thousand dollars each, in fact - if nothing is done to roll it back...

This tax that was enacted decades ago to make sure extremely wealthy Americans paid their fair share is now targeting 10 pecent of tax returns with incomes of $75,000 or less...

It discriminates against families with children since it banishes personal exemptions...

[thulldud]

On second thought, it should have been addressed many years ago, as soon as politicians realized that it was a growing problem...

It's only a problem for the taxpayers. Back burner.

[quadrant]

I'd like to abolish the AMT but not for a couple of years or so, say just before the 2008 Presidential election.
The overwhelming majority of those who pay the AMT come from Blue States, especially the suburbs of New York City, CT, Boston, and affluent areas of CA. Those who live there tend to be the liberal affluent who always demand tolerance and more government services. Let them feel the bite of the AMT for a few years, and we'll see how tolerant they are. It will be an excellent learning experience for them.
Plus, it fun to watch a Democratic presidential candidate explain why this tax on the wealthy should be repealed and other taxes should be increased.

[thulldud]

Wish taxes were only owed by the people that voted for them? That's right up there with wishing that all taxes could be "unstealthed", say, by abolishing withholding and making the ignorant working schlubs pay quarterly like the self-employed do. Wouldn't THAT open some eyes?

Which is why it won't happen.

[linda_22003]

Sorry to hear that Red Staters are not doing well enough to be affected. Was that really what you wanted to say?

[taxed2death]

This suburb dwelling CT resident does not like paying the AMT. Since you wish this tax on me...perhaps you won't mind if I send my tax bill to you.

[mondonico]

Not everybody who pays AMT is liberal, a Blue stater, or particularly affluent.

I don't feel like subsidizing this particular object lesson with money that would otherwise benefit my kids, so I say repeal the AMT now.

[homeywhite]

One aspect of AMT that does not get mentioned but I think needs to be addressed if the entire law is not repealed is the deductible exclusions. An example is attorney's fees. If you are injured in an accident and are awarded $200,000,you are now subject to AMT. In some states your total tax rate could be 40%.That means that you would pay the IRS $80,000, leaving $120,000, If you hired an attorney at a 50% contingency, you would be out another $100,000 leaving you with $20,000. If there were significant expenses incurred in obtaining the award, you could actually be in the red. If the attorney's fees were deductible you would have had $60,000 to cover expenses and hopefully offer some consolation for your injuries. Remember that the attorneys will be paying taxes on the money you paid them. Assuming the same tax rate, that is $40,000 or a total tax rate of 60% on the $200,000 award. Repeal AMT or at least address some of the gross injustice it creates

[quadrant]

Not at all, but anyone who can read the Census Bureau Reports knows that those who live in, Beverly Hills or Marin County, CA or Greenwich, CT have among the highest incomes in the country and consequently will be the most affected by the AMT. And it is these affluent areas where affinity for the policies of the left tends to run strongest.
My suggestion is to let the residents of these areas pay the full AMT for a few years and then see how they feel about steeply graduated income tax rates.

[linda_22003]

People in the categories and areas you mention have fallen into that AMT bracket for many years already. This is now hitting the honest-to-God middle class. If it hasn't affected you yet, that says where you are in the pecking order.

[Wolfie]

Not at all, but anyone who can read the Census Bureau Reports knows that those who live in, Beverly Hills or Marin County, CA or Greenwich, CT have among the highest incomes in the country and consequently will be the most affected by the AMT.

Their tax returns might be more subject to the AMT, but I don't think they themselves will actually be "affected" at all.

[quadrant]

Maybe you don't like the AMT, but the people of your state have consistently voted for people who support steeply graduated income tax rates. Why is that?

[Always Right]

I propose eliminating the AMT tax and replace it with the Hollywood tax. Since Hollywood stars know it is unfair for them to earn $20 million a flick while most the staff and other actors don't make 1/1000th of that, I propose a 90% tax on all movie star incomes over $50,000. Afterall, who can't live on $50K?

[babble-on]

I've always been struck by how closely the AMT resembles the "flat tax". One low rate, with fewer eligible deductions.

[quadrant]

Of course not, but the overwhelming majority are.
Object lessons are learned best when the consequences are painful.
If you live in a Blue State, perhaps you should remind your affluent neighbors at the next election on whom they are depending to repeal the AMT.

[tcostell]

Problem? It's a problem?.... It generates tons of cash for the government and it stays under the radar. Anything that you can get the financial benefit for without being held accountable is a godsend in Washington.

They'll change this when pigs fly.

[RipSawyer]

Afterall, who can't live on $50K?>>>>>>>>>>>>

It would appear that some on Free Republic think that fifty thousand dollars a year is still the fortune that it was forty years ago!