Alternative Minimum Tax

I have just completed my taxes for 2005. I start the damned things in early February and try to get them done quickly but something always pops up. This past week it was the baby but I decided today that I was going to find the last few items I needed and get them done.

I am proud to say that my wife and I have paid what is expected of our household so we did not sponge off the government, we paid our own way. Anyone who reads this site knows how much I hate the tax system. I think we pay entirely too much for services that the government is not supposed to provide. We continue to fork over cash for BS programs and to fund items that are over funded and underachieving (think public education).

I was worried this year that I might get hit with the AMT. The AMT was implemented back in the late 60s or early 70s and it was designed to make the few millionaires of the time pay their fair share by taking away a bunch of deductions based on some fancy formulas. The problem is that the AMT has not been changed since it came to life and people’s incomes have gone up so a whole bunch of people get caught having to pay the AMT. I am curious about the AMT for another reason.

The software I use calculated my AMT and it was $2435 lower than by the standard method. If this is the Alternative MINIMUM Tax, how come I did not pay that minimum? It seems to me that if they would have made me use the AMT if it showed I owed more money then they ought to let me use the AMT when it shows I owe less money. If this formula was designed to take away deductions and then calculate taxes to make people pay more then that means without my deductions (or those disallowed) I would pay less taxes under the AMT. It just seems wrong that they are making me pay more by using the old system. It is, after all, the MINIMUM tax. I should be paying the MINIMUM!!

This, of course, is another example of the government screwing us out of our hard earned money. Every time you turn around you pay a tax. There is a tax on non-food items, gasoline (which has a state and a federal), tax on booze, tax on tobacco, tax on property, and in Maryland we have a flush tax where they tack on extra money for the sewage you generate.

Since I just got done my taxes I think I will give my opinion on how it should run. If we have to pay taxes (and since some fools allowed the Constitution to be changed to allow it, we do) then we need to ensure the money is spent on items that are allowed under law. We should not be funding sports complexes, or monuments to Tupac Shakur. The tax code needs to fit in a book no larger that a Cliff’s Note. It needs to be simple. Everyone pays a certain percentage of their income in taxes. That number can never be changed and it will not be progressive (because progressive taxes are regressive in nature). If a family makes $10,000 a year they pay $1000. If a family makes $100,000 they pay $10,000. This allows for fairness in the system and everyone is paying the same as a percentage of income. There would be no deductions for charity or real estate taxes. There would be no estate taxes and people would not have to pay taxes on earning from investments.

Right now the system is so screwed up that no two CPAs get the same results when given the exact same information to prepare a tax return. If it is that complicated, we do not need it.

Actually, we need to repeal the 16th Amendment.

[tags]Taxes, Constitution, CPA, Flat tax, tax software, AMT, Alternative Minimum Tax[/tags]



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