Alternative Minimum Tax (A.M.T.)

It's an election year. And let's face it we pretty much don't know what the fuck candidates are talking about, when they start using all of that political mumbo jumbo. We, at Freshfeature have decided to educate ourselves and by extension you too! Today we're going to break down the Alternative Minimum Tax.

The alternative minimum tax was introduced in The Tax Reform Act of 1969. The tax was created to target a small extremely wealthy group who were able to evade taxes entirely or pay a very small amount due to tax law shelters for the extremely rich(the more things change, the more they remain the same eh?). During the Reagan era The Tax Reform Act of 1986 was introduced and "A law for untaxed rich investors was refocused on families who own their homes in high tax states." The A.M.T. has come under immense scrutiny because the tax has not been adjusted for inflation in over almost 4o years. Try to imagine what the value of 50G's was forty years ago.

"Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow."

In recent years Democrats have introduced temporary 11th hour legislation to soften the impact of the AMT. For instance the last patch was passed on 12/20/07 which forced the IRS to reprint it's tax forms.

Barack Obama: Supports AMT reform, but has failed to vote (No Vote) on legislation introduced by fellow democrats to do so.
John Mccain: Supports repealing the AMT, but has not voted (Voted No) in the interest of Middle Class voters when legislation(patches) have been introduced to help them until a more permanent solution is addressed.

Alternative Minimum Tax. New York Times (2008). Retrieved on 2008-05-16.
Congressional Budget Office - The Alternative Minimum Tax