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McCain on Alternative Minimum Tax

Posted By Jim On 06/14/2008 @ 1:51 pm In Personal Finance,Retirement | 5 Comments

Ahhh the lovely Alternative Minimum Tax [3]. 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 … [4] [CNN Money]


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[3] Alternative Minimum Tax: http://www.bargaineering.com/articles/tax-relief-101-understanding-alternative-minimum-tax.html

[4] McCain will repeal the AMT. Wait, no …: http://money.cnn.com/2008/06/13/news/economy/mccain_amt_phaseout/?postversion=2008061315

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