Alternative tax sneaking up on millions in US

Boston Globe ^ | April 15, 2003 | Susan Milligan

[sarcasm]

ASHINGTON -- Hundreds of thousands of Americans expecting a tax cut this year will instead have to pay an alternative tax that was designed to target the wealthy, but has increasingly hit the middle class, according to tax specialists and accountants.

[NoControllingLegalAuthority]

Government definition: Wealthy = Anybody working

[blackdog]

So leave the AMT in place, scrap the existing code, and set the AMT rate at 15% for everyone.

It's called a flat tax.

Use the AMT to say AMF to the IRS. Unintended consequences of a bunch of spineless polititical bastards can be turned on them for a change.

[biblewonk]

I don't pay any Federal taxes.

[philosofy123]

Lucky you. I am a working stiff, and got hit with this Alternative Minimum Tax thing? I did not even know it existed.

[blackdog]

This AMT will become the biggest vote grabber in history. Once the AMT will hit more than 50% of voting taxpayers, somebody will pander to that group to "SAVE" them from the clutches of run-away taxes. It will be a temporary rescue which will need reauthorization each year(in order to maintain loyalty) and will only be signed into law on something like midnight on April 14th of each year.

I am really amazed that a nation of a few hundred million apathetic sheep is what has evolved from a few thousand founders with balls and honor in only 200 years!

[blackdog]

Leona Helmsley speaks!

[blackdog]

Considering the creeping taint that the AMT is, will it not ensnare the Clintons, senators, congress-critters, and the like?

What special dispensation have they cooked up to unburden themselves of the AMT?

[Mamzelle]

I'm confused as to how this works...would you mind a summary of how it worked in your case? Apparently it hasn't hit me yet...

[blackdog]

If your deductions exceed a certain percentage of your income when you earn greater than a certain fixed number in your gross, you are dead meat because the AMT kicks in instead.

If you are in farming like I am, I will be it's victim in 2005. I plan on not purchasing the $5,000 of seed to plant, the $6,000 fertilizer, and idling my paid for equipment as well as return leased equipment.

On a good year farming, income might be 10% of expenses.

This will force me to rent my broken ground to a corporate grain interest, cull most of my livestock, and wait until tax laws change before farming resumes.

[E. Pluribus Unum]

Though both Congress and the administration agree that the schedule for paying the alternative tax should be addressed, neither is expected to initiate corrective legislation in the near future because it would cost the government hundreds of billions of dollars in lost revenues.

BWAAA-HAAA-HAAA!!!

Translation: We sure are lucky the tax system is so ridiculously unfair.

[blackdog]

Just wait though. Once two income earners figure out that the second spouses job, daycare, mortgage interest, a modest company bonus or stock option, and kiddies throws them into the jowls of the AMT, one spouse will quit work, stay at home, and send nadda to the treasury instead.

This is not something to defer acting on! Every time it stings the public, the public will respond.

I put in my quarters required for Social Security. Screw em. I didn't need that boat, vacation home, jet-ski, new car, or hair transplant any-hoo.

The AMT will kill consumer spending like a rejected credit card.

[philosofy123]

If you made good salary, and you have lots of expenses/deductions, there is a formula that compels you to pay extra taxes as a "minimum".

[philosofy123]

a nation of a few hundred million apathetic sheep

You got this right. Unfortunately, the grass root movements are mostly about silly things. WE need a grass root movement that reintroduces democracy back to us? If only 50% vote, and block of voters vote for a guy for some stupid reasons; such as his color, his religion, his look, republican, democrat, abortion,....At the end it is a matter of math! Whoever appeases enough fractions of the population to get a majority. The reality is this majority is not a majority at all.

[ChuxsterS]

I'm confused as to how this works...would you mind a summary of how it worked in your case? Apparently it hasn't hit me yet...

Here's another way it works.

If you exercise incentive stock options to buy your company's stock, and hold the stock, the AMT says that you have to pay 28% of your unrealized gains as of the date you exercised the options. In other words, for every $5 option you use to buy $20 stock, the AMT sees $15 of taxable income. Hence, you can be taxed on income you never received, and if the stock goes down, as lots of stock did in 2000-2001, you can end up in the hole with a big tax bill and nothing to pay it with.

You can poke around www.reformamt.org for more information.

[Mamzelle]

Thanks. I'm embarrassed to say I left the taxes to DH this year. He says that taxpayers are now required to to figure taxes two ways, and pay the higher. It doesn't happen to hit us...this year...

With your indulgence, I've been researching the situation of a liberal in my acquaintance, who was reimbursed in stock rather than salary a couple of years ago. (This guy has donated big sums to ACLU, Am Int'l, Planned Parenthood and various Dems whom I have opposed...). This stock has tanked. Is he in good shape with AMT, or bad? Does the ACLU get lucky next year?

[Mamzelle]

Tax invented thirty-four years ago--and is a big recent problem...doesn't quite follow.

[numberonepal]

OK Mr. President we're all very very tired of hearing these terrible stories about folks getting shafted for being married, for providing jobs, and for achieving. Those of us with the drive to achieve will continue to do so no matter what, and they very well know it. It's time for REVOLUTION folks.

We're over it, in other words! If this continues Atlas will shrug eventually. But how bad does it have to get before he does? Let's open our eyes and mouths here people. It's time for an end.

FReep anyone and everyone you can think of regarding H.R. 25
And support the Fair Tax

[ChuxsterS]

With your indulgence, I've been researching the situation of a liberal in my acquaintance, who was reimbursed in stock rather than salary a couple of years ago.

I'm not a tax professional; I just happen to have personal experience with the AMT. I know it applies with incentive stock options (ISO's), and other special income situations, and I also know the calculations are fairly convoluted... If your friend thinks he may be subject to AMT, he should definitely consult a CPA who's up-to-speed on AMT.

[Mamzelle]

Not a friend, but a political antagonist. Was curious to see if his pro-tax stand had borne fruit.

I've been reading around...Lieberman and another Dem are putting leg together to try to ameliorate AMT devastation to middle class.