Skeleton in the IRS closet. Alternative tax intended for rich now hits millions

Rocky Mountain News ^ | February 25, 2006 | News Wire Reports

[zzen01]

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.

[ovrtaxt]

Any Thoughts?

Don't even get me started. I won't contribute much in the way of reason, just thoughts not suitable for this forum.

Suffice it to say that taxing income is evil. The economic equivalent of control freak totalitarianism at it's worst.

[Dilbert56]

Just did my taxes with TurboTax. Three state and one federal returns. Yuk. There has got to be a simpler way. If people making between xx,000 and yy,000 pay, on average Z%, why don't we just make that the tax rate - no deductions or credits.

• You want to give poor people money - don't do it through the tax code, admit it's another giveaway program.
• What about people who pay significantly less than Z%? Too bad, join the club of the unsheltered.
• What about buying houses or giving to charity? Buy your house anyway, give your money to charity anyway and your tax is still Z%.

Look at the benefits.

• Vastly simpler preparation for the People.
• With proper witholding, most people wouldn't even need to file.
• The government would no longer have to decide which organizations are charitable and monitor them.
• Economic factors, like when people chose to buy houses, won't be distorted by tax implications. More of a free market economy.

Hey, I can dream

[zzen01]

You can "Thank" our 535 "US Representatives".

[Bigun]

Any Thoughts?

Only one:

We will never again be a free people so long as we have an income tax and the IRS!

[socialismisinsidious]

I'm more than a little riled....I got killed by the AMT this year and I have the first of 7 kids going to college next year (also learned that the nice little academic scholarship that she got will be considered INCOME! should she take it....she works her tail off and I get to pay more taxes. I'm sick of the IRS and the socialist income tax!

[socialismisinsidious]

problem is the AMT isn't hitting the rich...it is hitting the middle class; those of us who work our tails off but aren't rich enough for trust funds and brokerage accounts (and countless other loopholes that regular folks can't even imagine)

[dufekin]

I therefore call for dramatically simplifying the tax code to a limit of 100 8.5×11" pages at 12-point font with 1" margins of plain English written at no higher than an eighth-grade level, eliminating all loopholes that the ultra-rich use to avoid taxation. We then can lower the tax rate, although we should make the tax rate variable and tied to the rates of government spending and debt. Tying the tax rates to government spending would force the Congress, through the people they represent, to cut spending.

[Cicero]

I'm right in the middle of doing my taxes right now. It's absolutely awful. This year I am stuck with doing three different state taxes as well as the federal tax, because we live in one state, I work in another, and we just sold a house in a third. Fortunately I find that TurboTax seems to allow for that contingency. But we are going to get absolutely clobbered this year.

[RobbyS]

Taxation never hits the rich, the really rich. It is usally intended to affect the merely wealthy, and then it descends right into the middle of the middle class, because we have income that can't be hidden. So the rich have to pay up to 10% while we get hit for nearly forty.

[Spirited]

A brokerage account constitutes a tax loophole?

[Rakkasan1]

[Man50D]

The rich know how to avoid taxes.

Really? Then explain how the top 1% of wage earners pay %34.27 of all income taxes, the top %25 pay %83.88 of all income taxes, the top %50 pay %96.54. The bottom %50 of all wage earners pay only %3.46 of all income taxes. http://www.rushlimbaugh.com/home/today.guest.html

[Man50D]

Taxation never hits the rich, the really rich. It is usally intended to affect the merely wealthy, and then it descends right into the middle of the middle class, because we have income that can't be hidden. So the rich have to pay up to 10% while we get hit for nearly forty.

Read post #32.

[napscoordinator]

I am too and didn't even know it...LOL. This does suck though.

[napscoordinator]

This is crazy. I believe it must be happening to everyone this year 2005 taxes. I mean very few married couples make less than 58K and singles at 40K this is insane. They need to do away with this and quick. The other day they said the average family makes 70K on FREEPERS. So this tax is now practically for everybody.

[napscoordinator]

I can't believe they are considering that income. However with 7 kids after all those deductions, are you getting EIC maybe that can make up for it.

[IamConservative]

Generally speaking, is incentive stock compensation what is hitting everybody with AMT?

My tax attorney told me one time to never pay a dime of AMT. His reasoning was that the IRS has no way of knowing what you pay for those options or how you came into possession of them. I didn't qualify the "no way of knowing." I suspect he meant no way of knowing by looking at your return. They could certainly trace it through your employer.

I haven't been hit with AMT yet, so I haven't thought long or hard about his advice.

[Jason_b]

"Any Thoughts?"

Sure. New title. Skeleton in the IRS closet. In 1913, Income tax intended for rich now hits millions.

[flair2000]

What gets me is that the people hit the most with the AMT are people in high tax states and high property tax areas. People are getting punished for paying high taxes! You pay too much, so your gonna get stuck again!

[sauropod]

We're gonna have to talk to the Hamburgler about this.