AMT at top of Tax Reform Panel's Agenda (Fair Tax Endorsement)

According to several articles on the web, the President's Tax Reform Panel has placed reform of the AMT - Alternative Minimum Tax at or near the top of their agenda. More and more Middle Class Americans are getting hit by this income tax rule, My wife and I included this past year. For the First time we increased our Household income enough to get caught by this rule that has not been indexed for inflation. While we still got a refund it was very small and if not for the AMT, our legitimate itemized deductions would have qualified us for a refund almost 5 times what we received.

Both Democrats and Republicans realize the danger to their constiuients and know this must be changed. The problem is how to make up for the lost revenue.

If The President's Tax Reform Panel maintains the current Income tax than there are limited choices to offset the lost revenue.

Democrats may like a tax increase with increase tax rates on the wealthy. We know that is not going to pass in the Republican Congress.

Other alternatives include eliminating the tax deduction of local property taxes. This more heavily hits Blue States like New York and California.( my property and school taxes almost $6,000 on a $200,000 house in New York)

The Fair Tax eliminates the AMT, income tax, payroll tax, corporate income tax and the death tax. The Fair Tax not only makes all of the President's previous tax cuts permanent but eliminates the income tax and the IRS.

The Fair Tax replaces all of those with a well researched, Economists supported, and Progressive tax system with a retail level federal sales tax on all new purchases of products and services.

Tinkering with the current system will cause more political fall out and problems than just replacing the entire system with this legislative package already prepared and waiting in the Halls of Congress with 34 Co-Sponsors HR25 and S25.

Last Election cycle every politician that ran with the Fair Tax on their platform WON their races. They won with lots of opposition dollars against them distorting the true nature of the Fair Tax and its economic benefits.

A Brand new book has just come out written by Talk Show host Neil Boortz and Congressman Jon Linder of Georgia. "The Fair Tax Book"

Additonal Informations is available at the many section of www.fairtax.org . it is full of information in its in depth Research section which covers many industry areas for analysis. The FAQ section gives a great overview for almost every question asked and the Rebuttal section handles very soundly the critics that often misunderstand and misquote the true facts about the Fair Tax.

The debate will be in full gear in Septemeber and I hope you will all take time to know the facts about the Fair Tax.

Here is some information I found about the AMT.

In 1987, one year after the last major overhaul of the Alternative Minimum Tax system, only one tenth of one percent of all returns had to pay the Alternative Minimum Tax.
Today, the Alternative Minimum Tax is no longer just for high-income individuals. Now, many middle income Americans are paying the Alternative Minimum Tax or having their tax credits limited by its hidden effects.

The Treasury Department expects that more and more people will be paying the AMT over the next few years.
In fact, in 2010, the percentage of married couples with children paying AMT in all income brackets is projected to be 39 percent.

More people will be subject to the AMT in the future largely because the AMT exemption amounts have not been indexed for inflation. Regular tax brackets and regular tax personal exemptions are indexed for inflation each year to prevent bracket creep, an automatic upward shift in the marginal income tax bracket through inflation. More and more people will be subject to the AMT, not because they are making more money in real dollars, but just through the effects of cost of living adjustments in their wage income.

Go to http://www.fairtax.org for more information about the Fair Tax.

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer for additional information:

search: "national sales tax" OR "national retail sales tax" OR "fairtax"

The blog you quote is authored by someone exceedingly biased against the FairTax and, despite his claims to have researched the FairTax information, misses huge chunks of it.

In fact, he even extensively quotes from William Gale, Bruce Bartlett, and Brookings Institure - all three noted for EXTREME (and frequently questionable) opposition to anything FairTax. They even try to sneak in the old stunt (as have some of the Squirrels - SQLers - on these threads) of removing government consumption in order to shrink the tax base and thereby dramatically raise the required tax rate.

This blog is nothing but an extended hitpiece quoting large bits of misinformation that have been refuted on the FairTax website.

As for the emotional argument of "evasion" (always quite undefined), the poster does not seem to be aware of the gross amount evasion (as well as non-compliance, avoidance, and illegal income activities) that presently exists. The FairTax backers make the assumption that evasion will be the same - however, that makes for a bais AGAINST the FairTax rather than anything else.

The figures of the IRS admit to about 20-25% of the amount of current tax revenue for non-compliance (which they define as different from avoidance, evasion, and illegal income). That's a huge chunk of money right there and it's hard to see how the equivalent non-compliance under the FairTax could even approach a small percentage of that since the FairTax mechanisms are quite simple and straightforward while attempting to comply with the present income tax laws is very difficult even if one tries to do so.

Avoidance seems to mean taking advantage of the I.T. loopholes that exist (or perhaps even stretching them some), while evasion seems to be conscious breaking of the tax laws. Under the FairTax, both of these things would be greatly lessened as should be obvious to anyone stopping to think about it.

With illegal income, however, the present income tax does not even begin to tax the illegal income except the VERY small, indirect amount that is paid by the seller of the goods on his profits in a legal retail transaction ... and that amount is greatly smaller than the tax "contribution" with the FairTax. A factor of seveal hundred percent different so those who claim equivalent amounts are generated merely have not troubled themselves to see what happens in the two cases or, perhaps, for some reason choose to misrepresent. The FairTax is FAR superior ... and this massive infusion of additional tax revenue is not even counted in the "revenue neutral" derivation that was originally made. The upsot of this is that the revenue neutral percentage, at 23%, is actually overstated (too high) by a good bit and not understated at all.

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