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.

[The Old Hoosier]

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

The problem is, there's a dollar amount attached that qualifies you as "wealthy," and that amount has never been adjusted to reflect inflation.

[ScholarWarrior]

A good start, but still socialist.

I propose $1000 per head per year. Most of it goes to defense. Can't pay it, move to Canada or Mexico.

[patton]

Been there, done that. Cut our income by 80K this year, the wife quit, we shrugged.

Leeches can get their cash elsewhere.

[El Gato]

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

From the article: The answer lies in the tax code, which has not changed to fully reflect the impact of inflation on the alternative tax. Taxpayers who might have been considered rich in 1969 are upper-middle class in 2003 dollars, said

A reasonably nice car could be had for about $2,500 in 1969, now a comparable car, although probably lighter and with a few more bells and whisles, would probably cost about $25,000. A person, or their parent, who was earning enough to make the cost of that car say 1/3 of a years salary, would have been earning $7,500/year in 1969, while now they'd have to earn $75,000/year, yet that 1/3 of a years a salary will still only buy one car. Yet the numbers that cause the alternative tax to kick in haven't changed since 1969.

It's not this simple, but say that tax kicked in at 30,000 dollars a year, In 1969 that would be someone who only had to spend 1/12 of their years income to buy a car, IOW a pretty well off person. Now, due to inflation it's someone who would have to spend 5/6ths or 10/12 of a years income to buy that car. Obviously they'd be looking for a cheaper car so they could pay the rent and buy groceries, but they'd still have to pay that tax. Inflation has in effect reduced the buying power of the trigger level.

[upchuck]

Go here^ for a simple to understand explanation of the AMT. Kaye Thomas is THE MAN!! Great web site!!

Then, once you're thoroughly disgusted with our onerous tax system, go here^ for the soultion to the problem.

It particularly pisses me off that the pubbies don't have the cojones to address the AMT problem straight up.

[henderson field]

That's just the point. A few hundred million sheep did not evolve from a few thousand founders. They came from other countries, not to build a great nation - that was already done by greater men than they. They came to get the money. Now we have a moral decay that resulted from people coming for money for 200 years, and people who owe allegiance to their homelands not to our land.

[c-b 1]

Been there, done that. Cut our income by 80K this year, the wife quit, we shrugged.

Leeches can get their cash elsewhere.

We have cut the size of our business back over the past two years, the down turn in the econcomy helped.

There is no chance the AMT got us.

The parasites can look elswhere to cover their excess spending.

[Brimack34]

I think they did this cause they thought Companies were hiding profits. We are a small Company and we are not hiding anything, the economy hit the skids. So we get nailed big time!! This sucks you make money they kill you. You do not make money they kill you.

[Princeliberty]

Another big government tatic.
When doing tax cuts bury all kinds
things in the build that will effect
take away much of the tax benefits.

And when increasing taxes bury in all
all kinds of things that will make
the increase even bigger.

[Princeliberty]

Hey but it was Republican Congress
and a Republican President that put
in the last bill and did not have
it go up as fast as inflation
so it would hit millions of middle
class tax payers.
So that's a lot better than a Democrat
Congress and a Democrat President
doing the same thing.

[blackdog]

I respect your opinion but I really disagree. Immigrants cut grass, clean hotel rooms, do farm labor, and hold several jobs at once. They have strong family values, don't divorce, and are what we once were.

Americans today are just apathetic spoiled brats, living off the hard work of the previous generations. The government and schools have told them that that's what they deserve.

That's my opinion FWIW.

[The Wizard]

The AMT must be repealed, killed, removed, done away with

[blackdog]

I hope Charlie Rangell and the rest of the Way's and Means Committee reads some of the comments like yours and mine.

The AMT might just likely half revenues to the treasury. As each family gets stung by it, they will respond just like a chess game.

The jeans I buy at Goodwill last just as long. The used farm equipment I buy runs just as well. The used cars I buy run great and cost less to insure.

Savings realized from daycare, commuting, work clothes, lunches, are at least $1,000 per month. Add the $600 per month for the taxes I was paying and for $18,000 per year it cost me to work, forget it. I don't need all that "stuff" Madison Avenue tells me I just have to go out and buy on the television.

Just from staying at home and feeding our boiler with wood(that I cut/split/dry) I save another $300 per month in the winters.

Sure with all the labor of farming and self sufficency I'm spending a fortune of my time, but time isn't listed on a W-2. Hard work is good for the spirit.