Word: taxed
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Critics argue that the AMT is hitting the wrong people, ensnaring more and more middle-class families. Although just 2% of families with two or more children and household earnings of $75,000 to $100,000 a year pay the higher tax today, within five years virtually all such families will pay it--and the AMT will have moved further down the income bracket to some earning as little as $50,000 a year, projects the Tax Policy Center, a nonpartisan research group whose estimates are widely accepted. Put another way: 3 million taxpayers will fall victim...
...regular tax code automatically lifts tax brackets and increases deductions and exemptions each year to reflect the higher cost of living and rising wages over time. Not the AMT. There have been patchwork fixes, but without an inflation adjustment, more middle-class families fall prey each year as their income simply keeps pace with costs...
That depends on many variables including your income and deductions. But a couple earning $75,000 to $100,000 a year and has two or more kids pays, on average, $2,400 a year of additional tax when they fall into the AMT zone...
Only at a huge cost. To the federal government, the AMT has become a cash cow, projected to generate $660 billion of tax revenue over the next 10 years. In 2010 alone, the AMT will bring in $105 billion of additional tax revenue, or 9% of all federal income tax. Plagued by deficits, Congress is loath to turn its back on this bonanza--especially since it hits a relatively small political constituency...
Some charge that Republicans have been slow to act on the AMT because it strikes traditionally Democratic states hardest. There is no denying that Democratic strongholds New York, New Jersey, Massachusetts and California are top AMT payers, mainly because of their above-average incomes and state and local tax burdens--two key AMT triggers. "There are some conservatives who look at that with a certain glee," notes Len Burman, a co-director at the Tax Policy Center in Washington. But with the AMT about to swamp the middle class in all states, both sides of the aisle have plenty...