|
at least I oppose radical changes in it
I hope this chart works showing who pays it. Basically it makes sure people pay taxes above a certain rate. It adds back the following itemized deductions.
deductions added back - medical expenses less than 2.5% of AGI, employee expenses, tax preparation expenses, local taxes
So, to read the chart. A single person with an AGI (Adjusted Gross Income) of $55,000 would only be hit with an AMT if his taxes were below $3,835 which would be a 6.97% tax rate. The only way that would happen is if he had itemized deductions of $23,950. Instead of being some huge 'tax penalty' the AMT would most likely not increase his taxes over $8,494 which are the taxes that those of us who do not (or cannot) itemize deductions. Finally, a person making $55,000 is making more than 59.35% of American households.
I am not sure what changes are being proposed, but I really do not see the need to do more than move the threshholds a little higher, maybe up to $50,000 for a single person and to $70,000 for a couple. I did the numbers for a family of four. Under current law, a single person can put $5,000 in an IRA and reduce his AGI by that amount ($10,000 for a couple) and the family of four gets $2,000 in tax credits for their kids.
AMT relief seems to be targeted at a select number of higher income taxpayers who itemize alot. I would rather see the standard deduction increased by $2,000 or so, which would help more lower income people, and might discourage some people from itemizing, which I still see as largely loopholes for the wealthy.
single income AMT threshold itemized deductions tax at standard percentile
<40,250 ** none ---------------------------------------------- 45.4 45,000 ** 1,235 (2.74) ** $32,000 *** 5,994 ** 50.4 50,000 ** 2,535 (5.07) ** $27,750 *** 7,294 ** 54.87 55,000 ** 3,835 (6.97) ** $23,950 *** 8,494 ** 59.35 60,000 ** 5,135 (8.55) ** $23,400 *** 9,744 ** 63.05 70,000 ** 7,735 (11.05) ** $22,950 *** 12,244 ** 70.16 80,000 ** 10,335 (12.92) ** $22,500 *** 14,794 ** 75.84 90,000 ** 12,935 (14.37) ** $22,100 *** 17,594 ** 80.49 100,000 ** 15,535 (15.54) ** $22,250 *** 20,394 ** 84.07
married filiing jointly <58,000 *** none ------------------------------------------- 59.35 60,000 ** 520 (.9) *** $42,400 *** 4,966 ** 63.05 65,000 ** 1820 (2.8) *** $35,700 *** 5,724 70,000 ** 3120 (4.46) ** $32,000 *** 6,466 ** 70.16 80,000 ** 5720 (7.15) ** $24,700 *** 7,966 ** 75.84 90,000 ** 8320 (9.24) ** $18,200 *** 10,444 ** 80.49 100,000 ** 10,920 (10.92) ** $17,800 *** 12,944 ** 84.07
|