Talking back: Why isn't the AMT more unpopular?
Sammy from New York writes in about the alternative minimum tax:
You can thank TurboTax for much of the lack of outcry about the AMT, just like you can thank withholding for the general lack of outcry about tax rates.That's a smart point. Joseph Thorndike , the research director of the Tax History Museum (worst... field trip... ever...*), makes a similar argument in this contrarian commentary, "The Great Noncrisis of the AMT." Here's Thorndike:
Sophisticated software and professional tax preparation have rendered our federal revenue system in general -- and the AMT in particular -- just a bit too painless. TurboTax deals with the AMT almost in passing. Yes, the program tells the unlucky taxpayer, you have run afoul of this fiscal Frankenstein; but don't worry, we'll do the math. Tax preparers offer the same service to an ever-growing number of Americans. In 2002 more than 83 percent of Form 1040 filers paid someone else to do their taxes.Thorndike also notes that for most people financial bite of the AMT is smaller than you might think—the high average numbers you often see quoted in the media are pushed up by wealthier taxpayers. "AMT taxpayers will pay more," Thorndike writes, "but relatively few will pay a lot more." Bottom line: The AMT could be with us a good while longer.
*I kid. Actually, the THM is a virtual, online-only museum, and it's really quite interesting.
I think you are right. Every year, I fire up TurboTax, enter the W-2s, spend time coaxing Quicken (Mac) and TurboTax (Mac) to play nicely, and it's the one time a year I miss keeping a PC around just for Quicken/TurboTax.
I fill everything out, watch the refund box get bigger, then have the AMT calculated, and watch it shrink.
It should be upsetting, but it really isn't... I know that the AMT is at a much lower rate, and only after a decent amount of money, and if I am paying AMT, it means I beat the system, because I beat the tax code, so I have to pay in the alternative system.
Also, AMT for most people isn't a lot of money, and it's just chalked up as one of those things. I'd love to see it repealed, but my years of AMT paying look like they are coming to an end, so it doesn't mean that much to me.
Moving to a low tax state (Florida) has helped, even if our cost of living has escalated upwards here.
CNNMoney.com Comment Policy: CNNMoney.com encourages you to add a comment to this discussion. You may not post any unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate the law. Please note that CNNMoney.com makes reasonable efforts to review all comments prior to posting and CNNMoney.com may edit comments for clarity or to keep out questionable or off-topic material. All comments should be relevant to the post and remain respectful of other authors and commenters. By submitting your comment, you hereby give CNNMoney.com the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying information via all forms of media now known or hereafter devised, worldwide, in perpetuity. CNNMoney.com Privacy Statement.