Tax break coming for 170-240k
 

I don't know how long this thread will last without politics. But,
here's good news for some of us. Bottom Line: 28% bracket is expanding.


Almost rich? You could pay less tax next year - Aug. 12, 2010

Tax break
 

I don't see anything in the story about changes to the alternative min tax. Just because they change the rate does not mean reduced taxes. This is because they disallow or reduce your deductions, which means a higher overall tax bill. Yes, politics will come into the discussion, but the bottom line is the tax bill needs to be reduced period! You will probably get into the higher brackets sooner than later, because they are not indexed to inflation, or any cost of living index. Therefore while some may see a minimal impact, others will see a substantial impact.

As a 15 year fedex pilot I am in the middle of the seniority group, and am impacted by the alternative tax rate. This is just an us vs them tactic. Any one here NOT want to earn more money? Why then punish achievement?

I hope you are right about saving some from higher taxes, but it still looks like bait and tax to me.

If anything, that might throw more people into the AMT. It works both ways, a change in rates upward (experation of bush tax cuts) doesn't necessarily mean anything to AMT payers either.

We all know the whole tax code should be rewritten and grossly simplified. It's the preverbial "too many special interests" that have kept this from happening...mostly at the very high income and or corporate tax level. My wife and I as two wage earners have NO deductions other than a home mortgage, and some in congress want to remove that too. When subject to the alternative minimum tax, you effectively are denied ANY deductions, including the homeowner's deduction.

Congress has been unable to give up the revenue the AMT produces, and so puts band aid fixes on it year after year. If memory serves me right, the tax was orignally put in place in the 1970s after 100 of the wealthiest US citizens (read millionaires) paid NO income tax because of all the loopholes and deductions available to such "earners." Now, the triggering income level hits many professionals, including pilots, who are far from wealthy. Interestingly enough, I just saw a poll that showed 45% of Americans think you're rich if you have a 250K household income. Given the current tax code, my wife worked for nothing...we gave it all to Uncle Sam, (and we don't hit the 250 number.) There is also a huge jump in "average" income reported by tax rate....IRS statistics show the jump in average goes from about 220-240 to over 585 or so in the next bracket. In other words, there are a lot of professional households in the 220 area, but business owners and other well to do tax payers have a big jump to get to their average.

As an aside, I once read an estimate that a national consumption tax would require a rate of about 18% to equal the current tax revenue numbers. I personally believe that the first place to start is to STOP out of control govenment spending. (Not in my lifetime!) We should not be printing or borrowning any more money...a policy that is simply unsustainable and setting us up for even more problems. Somewhere else I read that the current federal deficit is roughly $40,000 for each man, woman, and child in the country; or in other words, the federal government has the typical family of four in debt of $160,000! It takes about $6400 of your tax money just to pay the interest on that debt each year, before you can begin to pay for other federal programs.

In short...I'm not sure I'd buy into the pre election tax reduction rhetoric...the shell game in Washington continues.

from the WSJ:

Alternative minimum tax
• Status: The "patch" to narrow this tax's reach for the 2010 tax year hasn't been passed yet by Congress. Thus the exemption for married joint filers is currently $45,000, as opposed to nearly $71,000 last year. If the patch doesn't get done, 32 million taxpayers will owe AMT in 2010 versus 5 million last year.

Clint Myers, an investment actuary in Georgetown, S.C., figures it would raise his tax bill 10%—more than the expiration of the 2001 tax cuts would.

• What's ahead: Congressional tax staffers say they think the patch will get done when Congress addresses income-tax issues.

• What to do: People who owe estimated taxes are supposed to be paying at higher "nonpatch" rates until Congress fixes the problem. You can avoid paying at these higher rates or risking penalties by using an IRS "safe harbor," such as paying 110% of last year's taxes.

• Also: if tax rates go up next year, it becomes harder to fall into the AMT. Thus deductions may become more valuable, says Douglas Stives, an accounting professor at Monmouth University in New Jersey.

You really want to get depressed.....

U.S. National Debt Clock : Real Time

cool web site
 

unfortunately, our National Debt rose $1,000,000 in the 30 seconds that I was looking at it!:eek:

Well quite obviously, you need to quit looking at it! :D

You're right my friend, back to my Sgt. Schultz imitation:)

No worry there since my yearly pay increases aren't indexed either.:eek: