A tax designed to stop the rich and corporations from taking advantage of tax loopholes is about to hammer the middle class.
As reported in the Detroit News editorial Scrap Special Tax Before it Hurts Families, the Alternative Minimum Tax (AMT) is about to hit a lot of Middle Income families.
The tax was meant to make it harder for rich individuals and corporations to dodge income taxes. but instead it is is becoming a trap for many middle-income families and a drag on company investments.
The tax was enacted in 1986 to stop the rivh from taking advantage of tax loopholes, the same loopholes created by the same Congress that passed the AMT.
The law of unintended Consequences being what it is, as the AMT was not adjusted for inflation and as the Bush tax cuts are further creating a gap between the standard taxes a family pays and the AMT, more and more families are getting belted with the higher tax rate.
Once again soaking the rich tends to beat on the middle class and serves to stop them from becoming rich, and it keeps their tax burden high.
The Detroit News is absolutely correct in calling for the abolition of the AMT (although they also hedge and offer that it be amended to be adjusted for inflation).
This, among many other of the foibles, loopholes and other errors of our bloated tax code shows the folly of using the tax laws as a means of social policy rather than just revenue generation.
Old Media Tribute #34
57 minutes ago