Sour Grapes

Tax month

I was interested to read "Dubya's secret tax hike" for two reasons. One was the title:

By President Bush's definition, allowing a tax cut to lapse is effectively a tax increase. Thus, by the president's definition, his administration, through inaction, is hitting the taxpayers with a large and fast-expanding tax increase.

The second reason was the tax referred to: the Alternative Minimum Tax. When I was self-employed as a software consultant and depreciating the minimum capital investments I had made — primarily a computer — I had to file Form 6251 (using the 8-page instructions). I never had to pay extra because of it, but I had to fill out the form anyway. It was extremely time-consuming and vexing.

The reason for my interest in AMT is explained by the rest of the Capitol Hill Blue story, excerpts of which follow:

Congress passed the AMT in a fit of political pique in 1969 to recover at least some taxes from 155 rich people who paid no taxes in 1966. The tax was never indexed, so as inflation and incomes grew, the AMT snared more and more people....

This year, 3 million taxpayers will pay more — about $3,000 each on average — under the AMT... than the ordinary income tax... Most of these taxpayers earn between $100,000 and $500,000, income levels unlikely to engender much sympathy. But next year it will bag 20 million taxpayers, and a few years after that it will hit one in three taxpayers, some making as little as $50,000.

... Large families in high-tax states especially get hammered. Soon, the AMT will cover almost all families with three or more children.

Original post by Namenlosen Trinker at 4/06/2005 01:32:00 PM Eastern time :: 1 comment(s) ::

1 comment(s):

As it happens, we wound up having to pay AMT for the first time ever this year. Thanks for the tax increase, George!

Comment posted by Namenlosen Trinker at 15 April, 2005 09:29