A Fix for the Alternative Minimum Tax?

Monday, June 25, 2007 | 03:30 PM

My pal David Kotok of Cumberland Advisors reminds us of the following:

An AMT fix (HR 2318)! 

Thank you to Congressmen Andrews and LoBiondo.
June 21, 2007

Are you one of the 23 million Americans who are/may be caught in the Alternative Minimum Tax (AMT)?   [yes, I am!]

If yes, this could be of interest.

A big preference items that catches folks and puts them in the despised AMT is your state and local income and property taxes.  Under the regular federal income tax system, these are fully deductible.  Under the AMT they are not.

That means the AMT taxpayers are trapped into paying taxes to three different jurisdictions without the ability to offset one tax before computing the liability on another. The effect of this is to put some taxpayers into marginal brackets much higher than 50%. Furthermore, the AMT works in a way that a simple capital gains transaction can use up the preference allotment and then cause the state and local taxes trigger the AMT.   You end up paying capital gains of 28% not 15% because of the effective rate.

Congress created this mess.  Congress is responsible for it.  Congress can fix it or repeal it.

Two Congressmen deserve praise for introducing a simple fix.  They are Rob Andrews (D-NJ) and Frank LoBiondo (R-NJ).  They have teamed up to introduce H. R 2318.  It amends the Internal Revenue Code IRC) so that the state and local tax deduction is not a preference item in the computation of AMT.  It is a two sentence amendment to the IRC.  It was introduced on May 15, 2007 and referred to the House Committee on Ways and Means.

Now it is up to the rest of us. 

If you live in a state (like NJ or NY or CA) which has high income taxes and high property taxes or both, this legislation gives you relief.  It removes the double and triple taxation of the same income without offset.

Call your Representative and ask her/him to co-sponsor the Andrews-LoBiondo bi-partisan bill, H.R. 2318.   Tell her/him that you are holding them accountable for fixing the AMT.  They created it.  They can amend it.

We would also suggest you thank Andrews and LoBiondo for their bi-partisan effort.

The main telephone number for the US Capitol can direct you to your Representative.  They will be paying attention to your call.  The number is 202-224-3121.  The operator will connect you with your Congressional Member.  If you do not know your Representative, give the operator your zip code and they will identify her/him for you.

Citizens Unite!  You have nothing to lose but the chains of triple taxation on your income without any mitigating offset.

-David R. Kotok, Chairman and Chief Investment Officer

Monday, June 25, 2007 | 03:30 PM | Permalink | Comments (24) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e009844a238833

Listed below are links to weblogs that reference A Fix for the Alternative Minimum Tax?:

Comments

OT: Just picked this headlne up on one of my favorite sites....

Greenspan Comes Out Of Retirement For One More Interest Rate Hike
June 25, 2007 | Issue 43•26

form The Onion...

Best regards,

Econolicious

Posted by: ECONOMISTA NON GRATA | Jun 25, 2007 3:42:25 PM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner