Skip to comments.Congress Slow to Adjust Alternative Minimum Tax
Posted on 12/06/2005 8:11:00 AM PST by george76
More than 17 million individuals and families could start the new year facing higher taxes because of a provision unfamiliar to most taxpayers -- the alternative minimum tax.
The new year means the expiration of a temporary fix that prevents the alternative minimum tax from hitting millions of people this year on taxes due next April.
But if Congress doesn't act, the additional tax will return for the 2006 tax year.
Originally designed to make sure wealthy individuals paid some tax, the alternative minimum tax reaches further into the middle class every year as inflation pushes more and more people into its grasp.
Congress regularly erects temporary dams to prevent the tax from trapping the middle class, and lawmakers are making a last-minute effort to keep that dam in place next year.
without any congressional action, the alternative minimum tax will hit 19 million taxpayers next year,...
That would include almost three out of four married, two-child couples whose incomes fall roughly between $75,000 and $100,000...
"It's a horrible tax. It's economically inefficient, it's unfair and it's mind-bogglingly complex. ...
unnecessarily complicated, unfair and unpredictable...
"The alternative minimum tax is a vivid example of why our tax code is dysfunctional," ...
the alternative minimum tax could impose a tax increase as large as $3,640 on some families next year.
Many common deductions don't count under the alternative minimum tax, including those for state and local income, property and sales taxes, and couples face a steep marriage penalty.
(Excerpt) Read more at foxnews.com ...
Which party was in charge from 1969 to 1994 and exactly who was "slow" to adjust the AMT?
I was put into the AMT last year when my sixth child was born.
It is wrong, wrong, wrong for your taxes to go UP because you have a child.
"It is wrong, wrong, wrong for your taxes to go UP because you have a child."
Well, that's one way to look at it.
Another way is this: Why should everyone else pay more to subsidize your additional child? Is that really the responsibility of someone with no children, or few children?
In what way do you, or anyone else, pay to subsidize my child?
The law permits (trivial) deductions to offset the cost of raising children - if you think that law should be repealed, fine.
But don't turn it into a law to punish having children.
Here's an idea: just eliminate the damn thing.
"In what way do you, or anyone else, pay to subsidize my child?"
By paying a higher ACTUAL tax rate than you do. Do the math. I don't get tons of deductions from my normal rate for kids, etc...
"But don't turn it into a law to punish having children."
So not getting a additional deduction for something is "punishment"? No one is stopping you from having as many kids as you want and can afford. I just don't want to pay for it.
When people who live in 1200 square foot houses and drive average cars have to do AMT, there is something fundamentally wrong with the concept.
The really wealthy like Terese Heinz Kerry hire a tax attorney (or several) to find the loopholes in foreign banks (to pay no taxes to America) or buy tax free muni bonds.
The AMT does not impact them much.
The raising of the theshold of the AMT impacts middle class working families.
Because the tax can only be determined by professionals with special software, it is expensive just to do the math. The extra $1000 that went to the CPA could have been spent on family health care, education, etc.
There are many other negative problems with AMT.
Yes. Supporting children and the parents who raise them is in the interest of society. Just ask Italy and other dying European countries where the Muslims are the only ones having babies.
Federal and state governments are both spending huge amounts of taxpayer dollars on what passes for education. That is a major way in which people who have few or no children are subsidizing those who have more children. On top of that, the federal government has rigged the corporate tax code in such a way that companies are financially incentivized to subsidize health insurance for employees and their families (and some states mandate and/or financially incentivize even more in this area than the federal government). So people with children get health insurance subsidized by people who don't (and people with many are subsidized by those who have fewer), because every dollar a company spends on health insurance is a dolalr they don't spend on other forms of compensation, like paychecks and 401k matching.
Many people (especially those not willing to dump their children into the government indoctrination centers) delay and/or limit childbearing, because their financial progress is slowed by having to help pay for other people's children.
No, having "society" raise children is not in anyone's best interests. People should have children when they can afford to raise them themselves, and not one day sooner. Europe is a mess because practically everybody there thinks the government should manage and fund everything. The immigration policies and hand-out programs of European countries which are overrun with Arab immigrants, were not implemented by governments elected by people who take care of themselves. They were implemented by governments elected by people who trust the government to handle everything, and heavy government subsidy of all childrearing expenses is a big part of what they think it's appropriate for government to be in charge of.
In place of paying x amount of taxes to pay for the common defense and general welfare, parents make a non-monetary contribution to the general welfare of much greater value by bearing and raising children.
There was always something fundamentally wrong with the concept. Aside from disproportionately penalizing success and productivity, it has never taken into account the huge cost of living discrepancies between different parts of the country. A family of four with $200,000 annual income, living in rural Iowa is living in great luxury -- big house on a big lot, multiple cars, private schools if they want them, plenty of extra cash for vacations, whole new wardrobes every season, and all the latest epectronic gadgets. A family of four with $200,000 annual income, living in Manhattan or many parts of California, is barely getting by -- with the extra heavy state and local income taxes, and sales taxes, half the income is gone from the get-go, renting or buying a very modest 3 bedroom apartment will swallow up about half of post-tax income, parking spaces rent for $300/month and up, so no way to afford more than one car (and in Manhattan many families in the $200,000+ income range have no car at all), and private schools for the kids would run around $25,000/year per child, so totally out of the question (and the public schools in those areas tend to be really hellish).
"Yes. Supporting children and the parents who raise them is in the interest of society. Just ask Italy and other dying European countries where the Muslims are the only ones having babies."
Well, if the American people having babies raise them in with mommy and daddy's beliefs that they are entitled to special treatment at other's expense, then as far as I'm concerned they can just keep their legs crossed.