Free Republic

REMEMBER BACK when you were young and poor and nothing made you madder than tales of rich people who paid nothing in income taxes? Well, you weren't alone, and that anger led to the creation of something called the alternative minimum tax, which was designed to keep the rich from living tax-free. Fast-forward a few years. You're a bit older, somewhat better off and paying far more in taxes than you ever thought possible. So what's the last thing you expect to see when you fill out your tax return? That you owe the alternative minimum tax. You can take...

On Friday, Sept. 8, the Council on American-Islamic Relations (CAIR) will host a dinner for former Iranian President Mohammad Khatami at the Marriott Crystal Gateway in Arlington, Va. The theme of his address at the CAIR dinner will be "The Dialogue of Civilizations: Five Years After 9/11." Khatami will be in Washington, D.C., to take part in an event at the National Cathedral. WHAT: CAIR Hosts Dinner for Former President of Iran WHEN: Friday, Sept. 8 from 7 p.m. to 9 p.m. (A private reception with President Khatami, including a photo opportunity, will precede the dinner at 6 p.m.) WHERE:...

ABC radio reported that Congressional Republicans have agreed to an extension of G.W.'s tax cut proposal. 15 million taxpayers would have been a victim of the alternative minimum tax. The agreement also extends exiting low rate for capitol investment.

In the spring, the political class tends to get exercised about the AMT. Last year, when about 3 million people paid the tax, there was a flurry of activity. The Senate finance committee held a hearing that promised to blow the lid off the stealth tax. Generally, Congress has kept the AMT under control by enacting so-called patches—temporary increases in the amount of earnings exempt from the AMT. At the hearing last spring, Robert Carroll, deputy assistant secretary at Treasury, testified that the AMT was set to spread rapidly. It is designed to ensnare the prosperous middle—people whose income places...

This tax season is shaping up as a banner one for the federal government. The strong stock markets have produced a gusher of capital gains taxes. Corporations are continuing to reap massive profits, and so they're paying more in corporate income taxes. Lehman Brothers economist Drew Matus told Barron's that he expects "a 17 percent jump in tax receipts this season (not including regular withholding), and just a 5 percent increase in refunds." The upshot: Tax-season payments could be $59 billion higher than last year. Should these projections materialize, Republicans will trumpet them as a validation of the supply-side tax-cutting...

The first data to document the effect of President Bush's tax cuts for investment income show that they have significantly lowered the tax burden on the richest Americans, reducing taxes on incomes of more than $10 million by an average of about $500,000. Skip to next paragraph Multimedia Interactive Graphic: Dividends in Your County Related A Terrain That Peaks at $33,392 and Bottoms at $21 (April 5, 2006) An analysis of Internal Revenue Service data by The New York Times found that the benefit of the lower taxes on investments was far more concentrated on the very wealthiest Americans than...

The upshot is that the AMT may spur a broad tax reform; it may lay the groundwork for a broad reform; or it may simply turn out to be a politically tolerable tax increase at a time when the country needs all the fiscal help it can get. In a first-choice world, the AMT is a horror. But in Tax Land, which is a third-choice world at best, the AMT looks heaven-sent.

WASHINGTON - Vietnam didn't spark the most constituent anger toward Congress in 1969. What riled people back then was the fact that 155 of America's super-rich didn't pay a penny in income tax. The resulting tax revolt got Congress to pass the alternative minimum tax to make sure that even the upper crust pays at least a little to Uncle Sam. Tax revolt may be at hand again.

How Bush's Budget Affects Your Taxes President Calls for One-Year Measure To Protect Millions from AMT; Compromise on Estate Tax? By TOM HERMAN Staff Reporter of THE WALL STREET JOURNAL February 7, 2006; Page D1 President Bush called for a one-year stopgap measure to protect millions of taxpayers from the alternative minimum tax this year. In his $2.77 trillion budget plan unveiled yesterday, the president made few new proposals that affect individual taxpayers and investors. He renewed his appeals to Congress to kill the estate tax and create new tax-favored savings vehicles to encourage people to increase their savings.

Would you be willing to give up all of your tax deductions -- state and local taxes, mortgage interest, church and charitable contributions, etc. -- in exchange for sharply lower tax rates? With the return of Congress, the debate is about to begin again. One major obstacle to tax reform is the confusion in the minds of most Americans (and many members of Congress) about average versus marginal tax rates. Your average tax rate is the percentage of your total income that you paid in taxes, and your marginal tax rate is the rate you paid on your last dollar...

For conservative lawmakers taking stock of the 2005 legislative year, two important lessons stand out. Whether they learn from them could determine the extent of their successes in 2006. Lesson No. 1: Some of the staunchest liberals in Congress appear desperate to secure either the outright repeal or a temporary mitigation of the Alternative Minimum Tax (AMT). Created in 1969, the AMT was designed to extract tax payments from a miniscule number of millionaires (then a mere 155) whose aggressive use of tax deductions and other legal techniques to shelter income erased their entire tax liability. Overwrought class warriors of...

Where you live can have a big impact on how much you pay in taxes each year. The spread, according to numbers crunched by the nonprofit Tax Foundation, might not be enough to make you pull up stakes and move to a new state, but it can give you a case of tax envy. The state and local burden ranges from 6.4% (Alaska) to 13% (Maine).

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...

As many as 17 million Americans will begin the new year facing the possibility of sharply higher federal income taxes in 2006. The number of taxpayers affected by the Alternative Minimum Tax could soar to 20 million or more unless Congress intervenes. Many of the new victims could see their federal tax burdens grow by several thousand dollars. Congressional leaders say that will never happen, pledging that the House and Senate will pass remedial legislation early next year limiting the growth of this surtax to a much smaller number. But there's no assurance this will occur, in part because some...

NEW YORK (AP) -- The alternative minimum tax is becoming even stickier -- and could entangle even more taxpayers next year. Congress is expected to recess for the holidays without an agreement on how to limit the effect of the AMT for 2006. While the AMT is expected to affect about 4 million taxpayers for 2005, that number will swell to about 21.6 million for 2006 unless Congress acts to lessen the impact. Congress has said it will do so next year, making it retroactive to Jan. 1, but it's still unclear exactly how that will play out, since other...

"WASHINGTON - Congress won't address the growing reach of the alternative minimum tax this year, leaving more than 15 million individuals and families subject to its bite for the first time next year. Senate Majority Leader Bill Frist (R., Tenn.) told reporters yesterday that legislation addressing the alternative minimum tax would not be completed this year. Lawmakers can act next year to make retroactive changes that ensure taxpayers do not pay more in 2006, but millions will start the year in its grasp."

Two weeks ago, the President's Advisory Panel on Federal Tax Reform issued its final report. Although our federal tax system is in dire need of restructuring and simplification, the panel's approach is a nonstarter. It proposes much pain for very little gain. The likelihood is virtually nil that it will form the basis for congressional action. The panel proposed two alternative tax plans for restructuring the federal corporate and individual income tax systems. One is called the Simplified Income Tax Plan and basically keeps the income tax while making a number of changes. The other is called the Growth and...

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...

The president's tax reform panel's report is due at the end of this month, but don't hold your breath if you were looking for the reform that is really needed. Preliminary signs are the panel will recommend relatively modest (but several desirable) changes to the federal tax system. For decades the present income tax system, with its tens of thousands of rules and regulations, has been widely recognized as so complex no one human, no matter how talented, can understand it.

Tax Reform Panel's Idea of Tax Reform? Raise Taxes President Bush's Panel on Tax Reform has leaked what appears to be a peak at what it will recommend in overhauling and reforming the Federal Income Tax Code. Their recommendation so far? It's to raise taxes under the guise of eliminating the Alternative Minimum Tax. Without a detailed history lesson, the Alternative Minimum Tax (AMT) law was passed in the late 1960's because 155 Americans who earned 200,000 dollars or more used legal loopholes to almost eliminate their entire income tax liabilities. Congress closed the loopholes with the AMT yet never...