Since 1969, when the federal government first unholstered the Alternative Minimum Tax gun on unsuspecting Americans, an increasing number of citizens have been caught in IRS crosshairs.
Back then, the Democrat controlled Congress supposedly …
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Since 1969, when the federal government first unholstered the Alternative Minimum Tax gun on unsuspecting Americans, an increasing number of citizens have been caught in IRS crosshairs.
Back then, the Democrat controlled Congress supposedly intended to aim the AMT tax gun at only “155 specific American citizens.”
Yes, you read that right: “155 specific American citizens.”
Who were they? Names aside, the “155 specific citizens” had “incomes over $200,000.”
Twenty of those 155 citizens were millionaires. What were they "guilty" of doing?
They were "guilty" of claiming deductions – that are allowed as written in the tax code - including monetary gifts to charities in order to offset tax on regular income.
During the fading months of the Johnson administration, Treasury Secretary Joseph Barr and Assistant Secretary Stanley Surrey instigated the proposals to “tighten tax loopholes” on the 155 specific individuals.
Reportedly, their comments to Congress led to the creation of the AMT.
But, as it seems, with all things government progressives do, millions more Americans have been caught in the AMT crosshairs.
Why have congressional incumbents permitted it to continue?
Because, the AMT functions like a new type of "reverse ATM," or “Automatic Taxing Machine."
How does the AMT take more of your money? It increases the amount of income that is taxable by adding back into your taxable income calculations what are legitimate deductions in the visible IRS tax system.
Thus, the AMT was setup by federal progressives to operate as a parallel tax system in the shadow of the regular tax system in order to take still more money from the people.
Today, the hidden effects of the AMT spring out from the IRS shadows to startle, surprise and shock millions of unsuspecting middle-income citizens. As a result, those ensnared by the AMT must pay hundreds or thousands more in federal income taxes.
Despite the political machinations over the years to periodically “patch” the problem, the AMT must end.
According to government stated estimates:
The latest patch “will protect 21 million (additional) taxpayers from being affected by the AMT on their 2010 taxes,” and without the patch, “80 percent of taxpayers with income between $100,000 and $200,000 would owe the AMT,” based on 2009 returns.
The bottom line is the AMT enabled the establishment of still more federal programs as well as the growth, reach and power of federal government in individual citizen’s lives and private finances. That is wrong and must end now.
Repeatedly, President Obama has said that he will pursue tax reform. If he does, what shape his reform would take is anyone’s guess. But, one thing is absolutely clear:
Real tax reform must include terminating the AMT completely, while simultaneously excluding any other new stealth IRS tax system or increasing IRS tax rates on citizens or businesses.
Visit Key Surveys to answer this week’s poll question: “Should the AMT be terminated?”
Richard Olivastro is president of Olivastro Communications and founder of Citizens for Change. A professional member of the National Speakers Association, he is available pro bono for charitable fundraisers and public forums and can be reached via email at RichOlivastro@gmail.com or by phone at 1-877-RichSpeaks.