The fiscal cliff could put millions of taxpayers into “AMT shock”
One of the key questions lurking in the “fiscal cliff” talks — though well below the public’s radar — is what happens to the alternative minimum tax, or AMT.
Implemented in 1969 to make sure upper-income Americans pay their share of taxes, the AMT has increasingly snared more middle-income Americans over the years because it was never indexed for inflation.
During the 2011 tax year for example, the AMT hit single taxpayers with incomes as low as $48,450 and joint filers making only $74,450.
But millions more Americans could be subject to the AMT in their 2012 returns if Congress fails to reach a deal on the fiscal cliff before year-end. That’s because the AMT is currently scheduled to hit individuals making as little as $33,750 a year and joint filers making $45,000. …
“Normally some four million people pay the AMT,” Hoey explained. “But if we don’t fix this on the 2012 income, what’s due in 2013 will be additional taxes by an extra 28 million households. If you’re in the $75,000 to $300,000 income bracket, you can likely forget about a refund if they don’t fix it.”
Blowback
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This is why I said after the election there will be no deal.
Obama doesn’t need to do anything and he gets EVERYTHING he wants. This is also why ALL TAXES need to have automatic SUNSET clauses. They should have to be re-authorized by Congress, not have it up to future Congresses to patch them.
Those of you wanting these new taxes on the “2%” better beware. That was what the AMT was originally designed for. Whenever you have taxes that aren’t coupled to the rate of inflation (the Obamacare taxes aren’t, FYI) inflation inevitably means the lower middle class will eventually make it there.
wildcat72 on December 1, 2012 at 10:36 AM
Then in Omerica you are either a millionaire or a billionaire. Take your pick and get some skin in the game.
It’s only fair.
CorporatePiggy on December 1, 2012 at 10:37 AM
Even people on the bottom end will be paying significantly higher taxes.
http://www.thefiscaltimes.com/Articles/2012/11/21/How-Your-Paycheck-Will-Change-After-the-Fiscal-Cliff.aspx#page1
Blake on December 1, 2012 at 10:41 AM
Oh no! Another crisis that MUST be averted by Republicans doing whatever democrats deem best!
Night Owl on December 1, 2012 at 10:44 AM
Too bad, so sad. America gets what it voted for.
txmomof6 on December 1, 2012 at 10:48 AM
Yeah man, let’s use the power of the State to stick it to those rich fatcat people who employ us. We can trust the government.
forest on December 1, 2012 at 10:51 AM
Karma – she ain’t no lady!
OldEnglish on December 1, 2012 at 10:51 AM
Obama era spending, Clinton era taxes.
What could go wrong?
L.I.B.
Kraken on December 1, 2012 at 11:01 AM
So my marginal rate is jumping from.15% to 28%. My child tax credit is cut in half, and I’ll be hit with the AMT. Thanks, Obama voters!
Vera on December 1, 2012 at 11:03 AM
Most middle-class AMTers are Blue-state city dwellers with high salaries due to a high cost of living. My heart bleeds //
Sekhmet on December 1, 2012 at 11:04 AM
This is an easy one. I already pay it, so I really don’t care. Jack it up.
besser tot als rot on December 1, 2012 at 11:19 AM
L.i.B.
davidk on December 1, 2012 at 11:24 AM
You know what needs to be covered more at Hot Air? The fiscal cliff, that’s what.
Chuck Schick on December 1, 2012 at 11:38 AM
I have 6 kids and don’t get any child tax credit – I say eliminate it. This is what the people wanted. They deserve to get it good and hard.
besser tot als rot on December 1, 2012 at 11:41 AM
Yup. I did the calculations. The AMT hits me so hard anyway, if all the tax brackets go up I’ll barely notice the difference.
Chuck Schick on December 1, 2012 at 11:55 AM
Sure. If me and my wife had our salaries, but living somewhere cheaper, it wouldn’t make a gigantic difference to our bottom line. The price we pay to live where we love.
ernesto on December 1, 2012 at 12:00 PM
“Fiscal cliff” … “AMT shock”!!!!!
That’s pretty much what Obama was going for, you know … “wealth redistribution”.
kregg on December 1, 2012 at 12:02 PM
What is even more satisfying is reading about it here while simultaneously watching a three hour conference about it on CSPAN, hosted by the Bipartisan Policy Center. The guests are people who were involved in the 1990 budget deal, so they can lead today’s politicians away from the dreaded fiscal cliff. Some of them have admitted they don’t actually remember 1990, but hey.
Night Owl on December 1, 2012 at 12:04 PM
Let. It. Burn.
BigGator5 on December 1, 2012 at 12:12 PM
…
We are so screwed.
petefrt on December 1, 2012 at 12:23 PM
In a sane, rational world one would think that a government would say, wealth creators we don’t need to collect a tax you because we’ve already destroyed the value of the dollar and we’ve collected them through the back door.
By the way, good luck collecting on our debt you bureaucratic stink bombs.
Our companies are already teetering over the financial deadfall known as the
governmentfascistregulatedrun banking institution. And no I’m not some delusional twit who smoked a pound of weed back in the day, as did Obama the divider.kregg on December 1, 2012 at 12:43 PM
Correction: “… collect a tax on you …”
kregg on December 1, 2012 at 12:45 PM
Just so you get a feel of how our money has been corrupted, $48,450 equals $305,376.00 in todays dollars. $74,450 in 1969 is equal to $469,252.00 today.
Socialists love inflation, because they can use Envy of those making less to push the progressive taxation, then sit back and wait as the curve flattens. In a few years, the AMT will cover anyone above the poverty line, i.e. everyone, just as they intended from the beginning.
Bulletchaser on December 1, 2012 at 1:04 PM
Hey speaking of lunacy, could someone tell the CSS guy that the login link at the bottom of all the threads is obscured by the HA logo?
And, once you’re logged in, the “Submit” button is also obscured.
greggriffith on December 1, 2012 at 2:00 PM
I still wanna know who originally had the brilliant idea of paying everyone with a pulse for reproducing with taxpayer money.
MelonCollie on December 1, 2012 at 9:11 PM
Hmm … begins with a the letter D?
kregg on December 1, 2012 at 11:09 PM