Sunday, September 18, 2011

The Problem With The "Buffett Tax"... that within a few years, it will wind up being the "Main Street Tax", as it will likely hit the middle class along with what remains of the rich...

Past as prologue.  Look at the history of the Alternative Minimum Tax:

Treasury Secretary Joseph Barr prompted the enactment action [in 1970] with an announcement that 155 high-income households had not paid a dime of federal income taxes. The households had taken advantage of so many tax benefits and deductions that reduced their tax liabilities to zero.

So it was designed as a very specific tax, with limited to zero impact on the average American. So how's that working out?

Although the AMT was originally enacted to target 155 high-income households, it now affects millions of middle-income families each year. The number of households that pay the tax has increased significantly in the last decade: In 1997, for example, 605,000 taxpayers paid the AMT; by 2008, the number of affected taxpayers jumped to 3.9 million, or about 4% of individual taxpayers. A total of 27% of households that paid the AMT in 2008 had adjusted gross income of $200,000 or less. [and that's an interesting figure, as it is the household level Obama constantly wants to raise taxes at, despite his oration about "millionaires" -ed.]

The primary reason for AMT growth is the fact that the AMT exemption, unlike regular income tax items, is not indexed to inflation. This means that income thresholds do not keep pace with the cost of living. As a result, the tax affects an increasing number of households each year, as workers’ incomes adjust to inflation and surpass AMT eligibility levels.

So the last "millionaire's tax" wound up becoming a middle class tax.  So why won't the Obama administration, the paragon of "fairness", overhaul the tax?

AMT raised $26 Billion of $1,031 Billion total individual income tax in 2008

Ah - because it totals almost 25% of income tax revenues, that's why. And, it doesn't hurt - as we mentioned above - that it actually kicks it at/below the $200K level, which is where Obama has always defined "rich". It ain't about fair, folks, it's about the government taking what's ours and making it theirs, at the point of a gun.   So when you hear this about the "Buffett Tax" -

The millionaires’ rate would affect only 0.3 percent of taxpayers, they said. That would be fewer than 450,000; 144 million returns were filed for 2010.  
-just remember the AMT.  And remember that Ben Bernake is running the printing press day and night, churning out the Benjamins in order to pay for Obama's fantasy world.  So if you think you'll never be a millionaire and this new tax will never affect you, think twice.  In a few years, you'll be breaking a million dollar bill (we'll call them "Obamas") just to fill up your tank.  If you can afford to, after you've paid the VAT, the AMT, and your "Buffett Tax".....

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