Bush's Stealth Tax Increase
The "next year" in question, as pointed out in the graphic above, is 2006, and you may be one of those 18 million!
I have many reasons for not particularly liking our president's policies, in fact I could spend the better part of the day writing about my distaste for this administration. The tax refund that Bush gave all of us at the beginning of his reign of mendacity (God, the bile is rising --- gotta get it in check!) is looking more and more like a carny scam, to wit: I get you to buy into my plan by giving you some money now, for most of us it was $300 or so, but I get to take it out of you later without explicitly telling you I will. That's the crux of the alternative minimum tax. So while Bush has been busying excusing capital gains taxes, i.e. taxes on UNEARNED income, there's a good shot that you may have more tax taken out of your EARNED income.
What's incredible about the "Bite" chart above is the increase for the lowest income represented, the $50 to $75K, and then the $200K to $500K bracket. The $500K bracket has the largest hit with increased taxes, why that is I haven't a clue especially when you look at the taxes dumped on a millionaire. The group with the next largest hit is the $50 to $75K, which pretty much makes up the middle class in this country, and therefore they'd be the ones carrying the burden for this increase in taxes.
The AMT was never intended to hit middle-class taxpayers, but it was also never designed to be indexed to inflation, either. So this meant that as our incomes went up over the years, more and more of us found ourselves subject to the bite of the AMT. The AMT was specifically intended to catch very rich taxpayers who, believe it or not, were able to escape paying any tax at all. Lo and behold, an idea which was good at the time but implemented with a huge fault in it, is now threatening the average Jane and Joe taxpayer, helping G.W. make up for the tax revenues that the Treasury is not seeing from rich folk and all those corporations with tax loopholes that Republicans (ok, some Democrats, too) like so much.
I have no clue how many who read this may be eligible for the AMT, but if you're one of those you may want to be dropping your political reps in D.C. a line and asking what the heck they're doing about the AMT. Yes, Bush has a committee working on this and other tax issues, but the longer doing something about this is put off the harder it's going to be to get around when it comes to tax time, and we all get the opportunity to take it in the shorts the next time out when
the tax bills are calculated.
If you're looking for more information on the AMT and how it might bite you, check out:
MSNBC - AMT — the tax we love to hate, Alternative Minimum Tax 101, and The Alternative Minimum Tax: What Is It and Why Should You Care?