The Alternative Minimum Tax Corrodes Both Tax System and Democratic Process - US Taxpayer Advocate
CONTINUING with the US National Tax Payer Advocate's Report on 20 serious problems countered by US taxpayers:-
The individual Alternative Minimum Tax (AMT) was originally enacted to ensure wealthy persons paid at least some tax. Because the AMT is not indexed for inflation, limited to high income taxpayers, or focused on tax loopholes, however, it increasingly penalizes middle income taxpayers for having children, getting married, or paying state and local taxes while allowing thousands of millionaires to pay no tax at all. The AMT is complicated and burdensome, even for those who are not subject to it. Many taxpayers must fill out the lengthy AMT form only to find they owe little or no AMT after all.
The AMT requires taxpayers to compute their taxes twice - once under the regular tax rules and again under the AMT rules. If the "tentative" AMT liability exceeds the regular tax liability, the taxpayer pays the difference as AMT. Thus, the AMT reduces the transparency of the tax system, making it more difficult for nearly everyone to predict what they will owe.
We have a law that grants popular tax benefits (the regular tax code), another law (the AMT) that eliminates the benefits, and then another law that undoes the elimination of benefits (the patches), usually at the last minute - a legislative Rube Goldberg contraption of unnecessary complexity.
AMT corrodes the both the tax system and the democratic process
The Tax Payer Advocate has recommended, "Permanently repeal the AMT.
Legal Corner Icon — the image was hosted by the publisher and was not captured.Legal Corner Icon — the image was hosted by the publisher and was not captured.Finance Minister Chidambaram is likely to present the 2013 BUDGET on 28 February 2013. We will start our "BUDGET RUN UP" soon - Please send in your suggestions to editor@taxindiaonline.com.
We will tell the FM what you want in his budget.