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While the items in this column are based on real events, most everything else is made up. Some quotes are real, some are as flimsy as a three-goal lead. Please, no lawsuits.
This week in Washington, a bipartisan group of lawmakers (BGL) began debating the merits of the alternative minimum tax. Also known as the AMT (or the ANT by self-centered myrmecologists), the tax has become the subject of intense debate in Congress of late. Four senators — two Republicans and two Democrats — are hoping to abolish the tax or extend it. Either works.
First implemented in the late Sixties, the AMT was intended to ensure that wealthy Americans pay their fair share of taxes. The legislation was triggered by a 1969 GAO survey of the richest taxpayers, which found that 155 well-to-do citizens paid no federal income tax whatsoever that year. Of the 155, half indicated they paid no state tax, either. Within that group, 12 percent said they threw slugs into toll machines when they drove through.
The senators say the trouble with the AMT is that it’s now hitting even middle-class workers, particularly those with two or more children or those who attempt to claim Cesar Romero as a dependent. In some cases, married couples with three children end up paying $4,000 more in tax thanks to the AMT. Said Sen. Charles Grassley (R-2D2): “People with children have enough problems. Plenty of problems. They’ve got the marriage tax, the death tax, and the college tax. Then, there’s all those karate parties.”
The AMT requires taxpayers to calculate their taxes twice, once under the standard tax rate and once using the AMT rate. If the difference in the two calculations is greater than 3 percent of the taxpayer’s adjusted gross income (before deductions, itemization, and fudging), a 0.97 percent multiplier is applied to the taxpayer’s five-year annualized salary. After that, the taxpayer takes the smaller of hat size or shoe size, subtracts pie (the number eaten in the preceding calendar year), and multiplies total number of toes (both feet). According to tax experts, the filer then takes the higher amount and sends a blank check to the IRS. At the time of the AMT’s passage in 1969, framers of the bill called it “a breakthrough in tax simplicity.”