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Anyone who understands taxes knows about the Alternative Minimum Tax, a "tax the rich" tax that was not adjusted for inflation so it crept down the income ladder but the government kept patching it so it would not hit people who make 30K a year. It was about to hit for 2012 but now they said it will be adjusted for inflation but I don't hear any talk about it and any details on how they come to the inflation calculation.
Will they allow ATM to hit people in lower incomes? Does anyone know how they determine how much it will be adjusted?
Frankly, I think there needs to be AMT for every tax bracket. I don't think it necessarily needs to be high - heck, I'm willing to go with $5-10. I think everyone should pay something for the running of our federal government. No one should owe zero, or worse, get more back than they paid in. Payroll taxes, sales taxes, city taxes, state taxes, and property taxes do not go into the funding of our federal government. Regardless, the AMT does need automatic inflation adjustment.
Frankly, I think there needs to be AMT for every tax bracket. I don't think it necessarily needs to be high - heck, I'm willing to go with $5-10. I think everyone should pay something for the running of our federal government. No one should owe zero, or worse, get more back than they paid in. Payroll taxes, sales taxes, city taxes, state taxes, and property taxes do not go into the funding of our federal government. Regardless, the AMT does need automatic inflation adjustment.
Lets not call it an "alternative" minimum tax. Lets just require 80% of the taxpayers to pay no less than $100 per year. I think almost everyone should pay into the system that the benefit from.
The AMT was created because certain "rich" people could legally reduce taxes using the tax code. Imagine how much simpler the tax code was when AMT was created.
The answer is not an AMT adjusted for inflation. The answer is a radically simplified tax code that elimiinates the deductions, loopholes, incentives, etc. that people use to reduce taxes. The government uses the tax code to change our behavior, and when they don't like the results, creates a band-aid like the AMT.
Ok, I understand what ATM is but it was supposed to expire for 1012. Every year more and more people became liable to pay the ATM tax because it was not adjusted for inflation. In the result of the fiscal cliff vote they said it was adjusted for inflation but there was no specifics as to the adjustment. That is the information I was looking for.
The AMT has not been adjusted for inflation for 44 years. It will now have an inflation adjustment, but what was the base 44 years ago, now snared 31 million 'millionaires' as the base.
I understand that it has not been adjusted for inflation but making it permanent and adjusting it for inflation was part of it. I did find more information.
For 2012, this figure is set at $78,750 for joint filers and $50,600 for others. Automatic inflation adjustments will apply in later years. Other dollar amounts associated with the AMT (the level where the 26% rate changes to the 28% rate, and the level where the AMT exemption amount begins to be phased out) are not altered for 2012 but will be adjusted for inflation in later years. In addition, the temporary (but perpetual) rule permitting the use of nonrefundable personal credits against AMT has been made permanent.
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