Personal Finance, Retirement 

McCain on Alternative Minimum Tax

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Ahhh the lovely Alternative Minimum Tax. For years the government has been putting patches on the AMT so that it ensnares fewer and fewer people, though without the corresponding adjustment in spending, and we once again dance the same dance now that we have set candidates to the two major political parties. Where do each stand on the AMT?

McCain, during the primaries, proposed doing away with the AMT altogether but recently changed his stance from repeal to phase out. Under the phase-out, more than 4 million households would continue to pay the AMT. To be honest, I doubt McCain really meant “appeal” when he was spoke about it because the thing generates so much revenue, $2 trillion over ten years. He likely meant exactly what he’s saying now, “appeal” it for the middle class but keep it for the wealthy.

I sympathize with the wealthy who feel unfairly taxed for the same services, but the money has to come from somewhere and we all have to buy the same things. While it sucks for someone to have half their next dollar taken away from the government, it hurts that person less than it does someone who has far less earning power (that doesn’t make it right, it just makes it more manageable). Plus, rich people don’t riot. 🙂

I do think that the government has to reign in its spending (I used to work in defense, I’m aware of some of its excesses) but unfortunately it’s Presidential politics season and it’s far easier to tax a smaller group than reduce benefits for a larger group.

McCain will repeal the AMT. Wait, no … [CNN Money]

{ 5 comments, please add your thoughts now! }

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5 Responses to “McCain on Alternative Minimum Tax”

  1. James says:

    Provocative posting. Thanks for getting it up.

    The funny thing about tax raises is that they are almost always sold as ways to tax the rich – make them pay their “fair share” – or some similar rhetorical buzzword. But very often what happens is the rich find a way around the taxes and middle and lower classes end up getting stuck with the bill.



  2. Neither McCain or Obama will be lowering taxes any time soon, as our current genius president lowered taxes during a war and put us in a terrible financial position. They will just be shuffling the deck to make it look like they are doing something.

  3. Curtis says:

    “I sympathize with the wealthy who feel unfairly taxed for the same services, but the money has to come from somewhere and we all have to buy the same things.”

    That’s an odd way to position it. There are many services that, by definition, rich people cannot benefit from, such as food stamps, medicaid, various housing grants and subsidies, and so forth.

    I’m not rich, though I hope to be someday, and I know I’m going to have to work hard to get there. For me, the unfairness is more about the government taking money that I’ve worked hard to earn because a handful of people think I don’t deserve it (or at least, that someone else, who quite possibly has not worked as hard as I have, deserves it more). I’m all for supporting the poor and infirm, but that should be done through private charity, not as part of a government mandate.

  4. Russ says:

    All the more reason to completely scrap the current tax system and put in the Fair Tax.

    BTW, the top 50% wage earners pay 96% of the taxes now.
    The richest 20% pay fully 80% of the taxes.

    I’m in the bottom 50% now, but I plan on being in that top 20% by the time I retire, and I will have done it by hard work, spending less than I earn, and investing what I save. Three things everyone in my position can do. I don’t see why ‘the rich’ are forced to subsidize people who won’t work, spend more than they earn, and don’t save a dime for completely predictable rainy days. Please notice I specifically wrote won’t work, not can’t work. I do believe it is the responsibility of government and society to help out those who can’t help themselves, or those with disadvantages who are doing their best.

    See Aesop’s The Ant and The Grasshopper
    What should the ant do?
    What should the grasshopper expect?
    What should the government force the ant to do?
    What should the government force the grasshopper to do?

  5. Thomas says:

    If you keep taxing the rich, they will either find ways around or simply just not make as much. Either way you are negating the impact of the so called taxation. Not only was it mentioned in the comments above about the true burden of taxes being on the wealthy, but who do you think provides the jobs and support for the economy? I am by no means wealthy, but the idea of just taking the money from somebody “because they have it” doesn’t work.

    @Chad – last time I checked, Congress passes bills and votes on going to war (with some Presidential options that were not used). I believe that during our current president’s reign, it has been a democratic controlled congress and state, with both an inherited recession and domestic attack. You are over simplify and incorrectly stating a president’s ability.

    PS – I didn’t vote for him.

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