Monday :: Apr 11, 2005

Blindsided By A Bu$hWacker At Tax Collection Gulch

by pessimist

"It's your money" exclaims king George. And yet, he's got his hand out for more of 'my money' than the 25% I'm supposedly paying!

Like many Americans, I'm in the midst of filing my tax returns. I prefer to be finished long before this time, but due to a business involvement, I end up having to wait until the last minute to finish because information that I need to do so doesn't arrive until about now. In fact, I'm still waiting for it, harassing the accountant by long-distance (at least I can write that off - provided I exceed 2% of my AGI!).

But already, I know that I am on the edge of having to pay AMT, just like many have discussed for a while now. I was pondering this situation while trying to sleep. I think I now understand why Bu$hCo claims 'deficits don't matter'!

They are going to tax them away without raising taxes!

Based on my rough calculations, I may end up paying an additional $300 or so in taxes thanks to AMT. Here are some of the reasons why:

You live on one of the coasts. Deductions for state and local taxes are disallowed by the AMT, making taxpayers in high-cost areas vulnerable to the tax, says Jeffrey Hoops, president-elect of the New York State Society of Certified Public Accountants.

I think I've mentioned many times that So Cal is the land of my abode.

You have a big family. Taxpayers with lots of children sometimes run into AMT problems, because the exemptions they claim for themselves and their dependents are kicked out by the AMT. The more exemptions, the more likely you'll trigger the AMT.

I have more than the statistical 2.1 perfect children.

Why This Is So

AMT affects primarily those taxpayers who receive significant deductions or income from sources other than ordinary earned income sources such as capital gains, interest or dividend income, employee benefits, and stock options. Retirees with large proportions of investment and pension income are classic examples of AMT taxpayers.

Through a phenomenon known as bracket creep more and more middle-class taxpayers have become subject to the AMT, a tax originally intended to target only the very wealthy.

But this doesn't really affect them as much, because they have so many other deductions - like sending Muffy and Buffy to Andover - that they can often reduce their taxable income low enough to avoid this problem. But even if they don't avoid AMT, they can afford it better than I can.

Thus, through AMT, I pay even more in taxes relative to that which I expect to pay. And it isn't restricted to the Federal government! Thanks to the Federal tax changes King George pushed through in his effort to assist Grover Norquist in his quest to take the US government and 'shrink it until he can drown it in a bathtub', I get to give Arnold even more of my money! Last year, I had to pay 40% of my Federal refund to the state because my withholding wasn't sufficient to cover my state tax bill.

So here's what I think was supposed to happen. After 9/11, Bu$h was trying to get us to spend money like the Rapture was scheduled in December. We were to follow Owwer Leedur's example:

People are going about their daily lives, working and shopping and playing, worshipping at churches and synagogues and mosques, going to movies and to baseball games.

Just like America did on December 8, 1941 - right?

But I digress.

All of this increased spending (Damn the bankruptcy laws! Full Spend Ahead!) was going to make the economy magically bigger, courtesy of these secret Chinese money herbs which grow on ancient trees somewhere in the rugged foothills of the Mighty Himalayas near Occupied Tibet. They will keep sending them to us because they "was able [sic] to get a sense of our soul - a land deeply committed to this country and the best interests of their country. Then we can make Wal-Mart bigger than most of the nations of the world, which in turn will make all of us richer!"

Once we're all richer, then we can eliminate the deficit by having to pay AMT!

Simple! Foolproof! Just ask the Fools who Proved this!

This year, King George is going to get back a sizable portion of that 'tax relief' he sent me back in 2003. He knew it was an investment, because from now on (assuming no changes in the tax laws that give me the same kind of tax relief he's given the Topper$) I will pay that much every year for the foreseeable future thanks to AMT. He gave a little and got a lot, while we got nothing for something.

Such a deal!

Say - is that space under that bridge taken? I'd trade you my barrel for it, but I have no other clothes!

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pessimist :: 10:19 PM :: Comments (1) :: Digg It!