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Income Taxes and AMT

• Transfer Machine

  [Jewish World Review, October 7, 2009] Close to half of all households will pay no income tax this year, according to the Urban-Brookings Tax Policy Center.

• Soak-the-rich strategies backfire in state after deficit-ridden state

  [Investor's Business Daily, October 7, 2009] Since sharply raising the taxes for those who earn more than $200,000 a year, New York has only collected about half of an expected $1 billion in income tax revenues from the state's wealthiest residents.

• Almost Half of Americans will Pay No Federal Income Tax

  [CNNMoney.com, October 5, 2009] In 2009, roughly 47 percent of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

• The Soccer Players' Revolt

  [Weekly Standard, August 27, 2009] In April, the British government passed a measure that increases Britain's top tax rate from 40 percent to 50 percent. The enormous hike applies not just to wealthy soccer stars but to anyone making over £150,000.

• The Corporate Income Tax and Workers' Wages

  [Tax Foundation, August 2009] While state-local corporate tax revenue has remained relatively constant for several decades, bringing in roughly five percent of revenue, some states have significantly increased their reliance on corporate taxes while others have relied less on that revenue source. The average state corporate tax rate has risen from 2.6 percent several decades ago to 4.4 percent today.

• The Case for a Federalism Amendment

  [Wall Street Journal, April 23, 2009] State legislatures have a real power under the Constitution by which to resist the growth of federal power, says Randy Barnett. They can petition Congress for a convention to propose amendments to the Constitution. What sort of language would restore a healthy balance between federal and state power while protecting the liberties of the people? One simple proposal would be to repeal the 16th Amendment enacted in 1913 that authorized a federal income tax. Congress could then replace the income tax with a "uniform" national sales or "excise" tax (as stated in Article I, section 8) that would be paid by everyone residing in the country as they consumed, and would automatically render savings and capital appreciation free of tax.

• More States Look to Raise Taxes

  [Wall Street Journal, April 9, 2009] A free fall in tax revenue is driving more state lawmakers to turn to broad-based tax increases in a bid to close widening budget gaps. However, raising taxes is a perilous proposition for lawmakers, who must balance their states' budgets every year. Not only do they face political heat for increasing financial burdens during the recession, but added taxes risk worsening their states' economic problems by, for example, further hobbling consumer spending.

• Obama vs. McCain: It's About Your Money

  [Wall Street Journal, October 26, 2008] When the new president "comes to town in January, he'll have to work on the short-term stimulus to the economy, and the longer-term plans may get deferred," says Clint Stretch, managing principal of tax policy at Deloitte Tax. "But the issue isn't the economic-recovery package and what the budget looks like in 2009, but what it will look like come 2012."

• THE EFFECT ON SMALL BUSINESSES OF HIGHER INCOME TAX RATES

  [Daily Policy Digest, October 28, 2008] Sen. Obama and some Congressional leaders have proposed increasing the 33 and 35 percent personal income tax rates to 36 and 39.6 percent, respectively, restoring the higher, Clinton-era tax rates on the top two brackets. This would raise taxes on 45 to 55 percent of small business income, according to a new Tax Foundation study. A new Tax Foundation study explains that because most small businesses are not required to pay the corporate income tax, small business income instead "flows through" to the owners who report it on their individual income tax returns.

• TAXES ARE HEADED UP

  [NCPA, October 9, 2008] With the coming expiration of the Bush tax cuts, federal income taxes are about to increase sharply, and automatically. In fact, they will occur without action by Congress or the president, according to James Carter, an economist for the U.S. Senate, and James Miller, senior advisor at Husch Blackwell Sanders, LLP.

• Why Inflation Means Relief for Taxpayers

  [Wall Street Journal, September 17, 2008] Based on inflation data released Tuesday by the Labor Department, the personal exemption amount, standard deduction, federal income-tax brackets and many other tax-related numbers will increase in 2009, thanks to annual adjustments required by law.

• How AMT Confuses Taxpayers

  [The Wall Street Journal, August 13, 2008] A new Treasury Department report says about 226,000 federal income-tax returns filed in 2006 either failed to include the AMT when it apparently should have been or contained "discrepancies" in calculating the amount of the tax. The report, issued by the Treasury Inspector General for Tax Administration, also found a few cases in which the Internal Revenue Service itself made errors.

• No Tax Increase Needed

  [Cato Institute, August 7, 2008] The tax increase advocates...argue we must increase taxes to reduce the deficit. The problem again is that tax increases slow economic growth, resulting in diminished growth in the tax base while, at the same time, increasing the pressure for more government spending.

• The Folly of Obama’s Tax Plan

  [The American, August 11, 2008]Senator , Obama’s proposed ‘tax cuts for the middle class’ are actually marginal rate hikes in disguise.

• Ready for a 150 Percent Income Tax Increase?

  [The Heartland Institute, July 1, 2008] If tax increases turn out to be the preferred solution for resolving the spending problem, the toll will be tremendous, CBO reports.

• Senate Tax Extenders: Another Sneaky Tax Hike

  [The Heritage Foundation, July 30, 2008] The "Jobs, Energy, Families, and Disaster Relief Act of 2008" is set for a cloture vote in the Senate. This is the first legislative step in yet another attempt by Congressional leadership to hike taxes under a cloak of faux fiscal discipline.

• Senate Tax Extenders: Another Sneaky Tax Hike

  [The Heritage Foundation, July 30, 2008] The "Jobs, Energy, Families, and Disaster Relief Act of 2008" is set for a cloture vote in the Senate. This is the first legislative step in yet another attempt by Congressional leadership to hike taxes under a cloak of faux fiscal discipline.

• In Case You Missed It...

  [The Wall Street Journal, July 14, 2008]Welcome to what might be labeled "complexity taxes" -- additional taxes that people wind up paying because they don't have the time, knowledge, energy or patience to master the increasingly complex Internal Revenue Code.

• AMT Patch Bill Disguises a Tax Hike, Again

  [The Heritage Foundation, June 25, 2008]The House of Representatives passed another huge tax increase. Earlier in the year they passed a big, economically harmful tax hike attached to a bill expanding veterans' benefits. This time, they married a big tax hike to a bill extending the Alternative Minimum Tax (AMT) patch for 2009.

• European Levels of Taxation: Barack Obama's Tax Plan

  [The Heritage Foundation, June 26, 2008]Among the more prominent elements of his tax proposal, Senator Obama would end the Bush tax cuts and allow the top two tax rates to return to 36 and 39.6 percent. He also would allow personal exemptions and deductions to be phased out for those with income over $250,000.

• House Panel Approves A Paid-for AMT Relief Bill

  [By Jim Abrams, Associated Press Writer, June 18, 2008] The House Ways and Means Committee voted 22-16 for legislation saving more than 20 million largely upper-middle-class families from shelling out thousands of dollars for the AMT in 2008, a concept that nearly all lawmakers support.

• Coming Together on Tax Simplification: AMT and Extending the Tax Cuts

  [The Heritage Foundation, April 14, 2008] The purpose of the AMT was to ensure that people who take deductions pay a minimum tax; a repeal clearly will lower their effective tax rate. Furthermore, AMT repeal will not increase marginal tax rates so long as the repeal is in conjunction with an extension of the Bush tax cuts.

• House passes $54B in tax breaks, energy incentives

  [Fox News, May 21, 2008] The wide-ranging legislation passed 263-160, sending it to the Senate and an uncertain future. Most Republicans opposed the bill because it is paid for by requiring some corporations with offshore offices to pay more taxes and doesn't address shielding taxpayers from the alternative minimum tax.

• Bad Bounce

  [Reason, March 1, 2008] A new report finds that banning payday lending -- small, short-term, high-interest loans available from companies like Cash Advance and Check'n Go -- makes customers worse off.

• How 'Pay-Go' Turbochrger

  [Investor's Business Daily, February 21, 2008] Pay-go, short for "pay-as-you-go," made a name for itself in last year's fight to forestall the alternative minimum tax's (AMT) full impact. The attempt to stop a tax hike with an offsetting tax hike underscored the procedure's dubious nature when applied to tax cuts.

• The Tax Threat To Prosperity

  [Wall Street Journal, January 25, 2008] In sum, when you cut the highest tax rates on the highest-income earners, government gets more money from them, and when you cut tax rates on the middle and lower income earners, the government gets less money from them.

• Proposed Surtax Would Be Worse Than Existing Alternative Minimum Tax

  [Heartland Institute, February 1, 2008] A surtax would reduce work effort, reduce saving and investment, and increase tax avoidance and evasion.

• The Florida Yankees

  [Wall Street Journal, November 20, 2007] Florida has no personal income tax, while New York's rate for the top bracket is 6.8 percent, rising to 12.15 percent in New York City.

• The Real Pending Tax Hike

  [Washington Post, November 9, 2007] Washington is abuzz about the tax proposal introduced recently by House Ways and Means Chairman Charles Rangel (D-N.Y.). The bill tackles a host of tax policy matters but its centerpiece proposes to repeal the Alternative Minimum Tax (AMT) and offset that revenue loss with an $800 billion tax increase on the roughly 3.5 million taxpayers earning above $200,000 a year.