Posted on 02/14/2012 12:46:44 PM PST by Oldeconomybuyer
Say goodbye to the much-loathed Alternative Minimum Tax and hello to the Buffett Rule. Sweet relief. The AMT has perplexed taxpayers and agonized accountants for decades. But wait: Are the AMT and the Buffett Rule really so different?
The two take aim at different types of tax avoidance, so the details have little in common. But the headline is the same: Both were designed to make sure that wealthy citizens pay their fair share of income tax -- without creating a tax monster that somehow reaches down to regular people. When the AMT came into being in 1969, rich people were avoiding tax through legal loopholes and generous deductions. Today, there is less of that. But these days some big earners are manipulating income to look like capital gains, which is taxed at a far lower rate -- and the Buffett Rule is intended to stop that. Different schemes, different measures.
Incredibly, the flaw that most riles critics of the AMT -- that the tax is not indexed to inflation -- is also true the Buffett Rule too.
Only a series of temporary congressional fixes has stopped the AMT from becoming Everyman's monster and has staved off certain voter revolt. As Daniel Gross notes in a post on the subject:
"Almost every year, Congress passes a 'patch' that prevents the AMT from ensnaring vastly more people. Had Congress not acted, as the Tax Policy Center points out, in 2012, "45% of all tax filers with cash income between $75,000 and $100,000 will pay the AMT, up from 0.4% in 2011, when the temporary AMT fix or 'patch' is in place."
The Buffett Rule resets the target to an appropriate level, for now. But without an annual inflation adjustment, the same old issues are certain to resurface.
(Excerpt) Read more at news.yahoo.com ...
I don’t know why they just don’t take 15 percent from everybody working. No having to file. If you make money under the table, good on you. If you are giving 100,000 from Mom and Dad, good on you. If you work at the local Olive Garden making 3 bucks and hour but get 100 dollars in tips a night than good on you. I think that would just make it fair and easy for everyone. It basically is a flat tax but without paperwork.
The main reason is that it wouldn't raise enough money. And, because the last century and a half have been years of envy stimulated by endless class rhetoric, the equal taxation rate wouldn't allow for democratic (small d) satisfaction of mass jealousies.
That is such a shame. The poor should be happy to pay something to continue various NEEDED items like our military for example.
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