Bush's Secret Tax on Democrats

Bush's Secret Tax on Democrats
How the Alternative Minimum Tax has become a Republican weapon.
By Daniel Gross
Updated Tuesday, April 13, 2004, at 2:04 PM PT

http://slate.msn.com/id/2098757/

President Bush and the Republican Congress, who believe fervently in cutting taxes for the rich, are quietly presiding over a most remarkable kind of tax increase for high-income Americans.

<snip>

While Republicans are patting themselves on the back for reducing marginal taxes, they've been oddly silent about how the AMT excludes millions of Americans—and relatively well-off ones at that—from the benefits of the tax cuts. Here's a theory: Could it be because those most likely to fall prey to the AMT live in states that Bush-Cheney '04 has already written off?

<snip>

The AMT seems designed to snare people who earn between $200,000 and $500,000; who work in fields like finance and technology; and who live in places where property taxes and state and local income taxes are high, like New York, New Jersey, Connecticut, Massachusetts, California, and Oregon—states that are resolutely Democratic.

(Much, much more...)

Not all that surprising, but VERY interesting. I'm not surprised by this move, shows how low these bastards will sink.

.

you. This tax isn't intended to catch middle income folks, but that's what it seems to be doing.

<snip>

As Bill Gale and Leonard Burman of the Brookings Institution warn in this piece:
http://www.brookings.edu/views/op-ed/gale/20040121amt.htm

By 2010, the AMT will affect 33 million taxpayers—about one-third of all tax returns—up from 1 million in 1999. This would make the AMT almost as common as the mortgage interest deduction is today. The AMT will be the de facto tax system for households with income between $100,000 and $500,000, 93 percent of whom will face the tax. It will encroach dramatically on the middle class, affecting 37 percent of households with income between $50,000 and $75,000 and 73 percent of households with income between $75,000 and $100,000 (compared to less than 3 percent for each group in 2002).


Mkes me feel sick.

From the Brookings article.

'The expansion occurs because the AMT is not indexed for inflation and because of the 2001 tax cut. Because it is not adjusted for inflation, AMT liability tends to increase every year, even if real income does not change. At the same time, the tax cut reduces regular income tax liabilities without providing permanent AMT relief. The 2001 tax cut will more than double the number of people subject to the AMT in 2010 (from 14 million to 33 million). If the AMT had been indexed when the regular income tax was and had the 2001 tax cut not been enacted, only about 300,000 households would face the AMT in 2010.'

- as usual the right wing tries make the situation so that a large part of the middle class is affected - so then it can scream that removing a tax that almost totally hits the rich is required - and both middle class and rich should get rid of it.

They did the same thing with the tax cuts - 1/3 goes to those making less than 200,000 - meaning over 90% of the population, while the top 10% gets 2/3rds of the tax cut. But since we all get something isn;t it fair! - as we forget the unfairness of a payroll tax with near no tax on the income of the rich (via the cap on the wages taxed to any single person), and the increase in the birth tax via the increase in the National Debt and via the middle class increase via state tax increases and middle class expenses - education and health care - increases.

passing this tidbit on to my Congresscritters.

A simple indexing fixes problem - or conversely raising the income tax back to where it was pre-Bush.

"A simple indexing fixes problem"

yes, I noticed that.

who designates the + or - for the indexing?

Not atomic science - and revenue loss less than 20% of $480 billion cost of full repeal of Alt Inc. Tax.

Indeed getting the per child out of the Alt Min limit ends the problem for 90% of the new Alt min tax payers under a 100,000 of income.

now we have an accountant. Nasty thing.....* has made it worse

Great book and worth your time. Covers the AMT in detail.