Being close to tax day, I thought a little discussion on a tax topic would be in order. The Alternative Minimum Tax (AMT) could be more aptly named as Another Malicious Tax. This nefarious piece of nastiness can jump up and bite unsuspecting taxpayers.
Basically, it was designed to make sure high income families were paying their fair share of taxes. Some people ended up paying relatively low tax amounts due to deductions and tax credits they used. So, the government didn't like that and instigated the AMT in 1969. The problem is that inflation measures were not incorporated so over time more and more people have been impacted by it including the middle class. It was never intended to affect the middle class but rather was an additional tax on high income families. Congress has incrementally increased the level at which a taxpayer is affected by it but has not yet put an inflation provision attached to it.
One example I'm familiar with is a family who had to pay the AMT when they were making an average annual wage and had 8 children. Each of the deductions they received for the children was much needed and getting hit by the AMT was not good for the financial picture.
Hopefully, Congress will either repeal the AMT altogether or attach an inflation provision so that it doesn't negatively impact the middle class as it was never intended to do.
We won't get into the discussion of whether it is fair to place an additional tax burden on high income families but at a minimum, provisions should be put in place to address inflation.
If you'd like to let your congress person know your thoughts on "Another Malicious Tax," go to senate.gov or house.gov and email them.