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23M Americans Could Be Hit By AMT Tax

From CNS News:

23 Million Americans Hit by a Tax Hike, But They May Not Know It Yet

Tuesday, October 05, 2010
By Dan Joseph

(CNSNews.com) – Almost 23 million American households are about to have their federal taxes raised by an average of $3,900 this year, but they may not know it yet.

They could get a big surprise when they prepare their tax returns next year.

Among those subject to this already-in-place tax increase are some families making less than $50,000 per year, and virtually all married couples earning between $100,000 and $500,000 a year, according to data published by the Congressional Budget Office

This tax increase on almost 23 million people will happen if Congress does not quickly pass legislation that temporarily increases the amount of income exempt from the Alternative Minimum Tax.

The temporary reprieve passed by Congress for each of the past nine years expired on Dec. 31, 2009, and so far, Congress has not extended the AMT "fix" for 2010.

According to the CBO, an estimated 4.5 million American households were subject to the AMT in 2009, and 27.2 million are now liable to pay the AMT for the 2010 tax year unless Congress acts before Dec. 31. Under current law, at least 22.7 million American households that did not have to pay the AMT last year will have to pay it on the income they have been earning since Jan. 1 of this year

The AMT was enacted in 1969 and was intended to impose taxes on high-income individuals who used deductions and loopholes to reduce or eliminate their liability under the regular income tax. Because the tax has not been adjusted for inflation since then, additional families at progressively lower income levels become subject to the tax each year…

So far this year, Congress, which adjourned last week, has failed to take action on the matter. If Congress fails to renew the “patch” before Dec. 31, according to CBO, the 27 million Americans subjected to the AMT this year will see their tax bills rise by an average of $3,900.

Of the households that will be hit with the AMT this year under current law, according to CBO, 3 percent are households making less than $50,000 a year, 35 percent are household making between $50,000 and $100,000 per years; 47 percent are households making between $100,000 and $200,000 per year; and 14 percent are households making between $200,000 and $500,000 per year.

So much for Mr. Obama’s solemn promise not to raise taxes on anyone making less than $200,000. But of course he didn’t say "read my lips," so our news media won’t complain.

As the law now stands, virtually all married couples in America earning between $100,000 and $500,000 will be hit with the AMT this year–on income they started earning ten months ago

Congress went off to campaign without fixing the AMT or extending the Bush tax cuts. Which means that making the biggest tax increase in the history of the nation is inevitable unless they do something in the lame duck session.

In all of the media reports about what bills might be introduced during the lame duck session, we have yet to see any mention of ‘patching’ the AMT. And, of course, there are no guarantees that they will even extend the Bush tax cuts for the ‘middle class.’

And yet Mr. Obama laughs at the idea that businesses are uncertain about the future.

This article was posted by Steve on Wednesday, October 6th, 2010. Comments are currently closed.

7 Responses to “23M Americans Could Be Hit By AMT Tax”

  1. U NO HOO says:

    I look at it this way, when the Bush tax cuts expire we will then be taxed under the Clinton Tax Increase.

    Simple as that.

  2. U NO HOO says:

    I look at it this way, when the Bush tax cuts expire we will then be taxed under the Clinton Tax Increase of 1993.

    Simple as that.

  3. proreason says:

    Petronius will enjoy this article.


    Diocletian was a Roman emperor a couple of centuries before the final fall of the empire who implemented the tax system the author claims was the death nail in the coffin of Rome. It prolonged the decline but made it ultimately inevitable.

    • Petronius says:


      Thanks, pro. Striking parallel to what was probably the first totalitarian state.

      As a footnote to Croke’s comparison, under Diocletian the rulers undertook a program of self-aggrandizement. This included splendid palaces, ceremonies, lavish lifestyle, and coin propaganda. The emperors took particular gods as their patrons and companions; Diocletian was paired with Jupiter, and Maximian with Hercules. The tetrarchs were glorified as the only force that stood between the people and certain catastrophe.

      Diocletian also began the great persecution of Christians in 303 AD. It lasted over 10 years and more than 3,000 were martyred.

      By the way, there is another Petronius who posts comments on American Spectator (he’s not me).

  4. Curmudgeon says:

    I’m told the AMT tax is always last minute and that they’ve played budget games with it for years, counting it as not being fixed for budget purposes but then adding the fix in later.
    Of course, out would be nice for our government to show the slightest concern for our need to plan for our futures in any area…

  5. preparing4theworst says:

    Here is what I am seeing…1) The dems really do not care about our tax burden so this is strictly an option for them, 2) They will wait until after the elections to see if there is anything in it for them, 3) if they lose they have nothing to lose by not fixing the AMT or by renewing the Bush tax cuts 4) if they win they see it as a “mandate” to putz around and do nothing and blame Bush for allowing them to put a sunset date in the original bill. Our taxes WILL go up one way or another but Obama can (in his view) state that HE never raised our taxes based on the concept that for him to raise our taxes he must do something to effect that and that if he has done nothing and the go up it is not his fault, he didn’t raise our taxes, it just happened…..get ready

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