As a professional tax preparer and an IRS enrolled agent, I was pleased to see Congressman Patrick Murphy's vote to relieve a large number of taxpayers from the Alternative Minimum Tax.
This tax was imposed in 1969 and revised in 1986 in order to prevent high-income taxpayers from sheltering huge parts of their passive investment income from tax. But the calculations were never indexed for the increase in the cost of living.
In 1986, $125,000 to $150,000 was a very big income; in 2006, it was the yearly income for many two-wage-earner households. These folks are ordinary working people. The calculations for the tax are affected by high mortgage interest, real estate taxes, employee business expenses and number of dependents, as well as the high passive income it was designed to tax.
In my practice, for many years no one paid the AMT. Then about eight years ago it started popping up in a few families with two working parents. Many of the men were in the building trades, working outside in freezing weather to support their families. Each year the number of people paying this tax doubled. Now, about 20 percent of my clients pay this tax.
Very few of these taxpayers have the investment and other passive income that this tax was designed to catch; they are just working hard and living from paycheck to paycheck. It has gotten so bad that we have posters in the preparer offices explaining the AMT and asking our clients to contact their congressman and senators and ask for relief.
Murphy's vote to prevent over 96,000 taxpayers in the 8th Congressional District and over 25 million taxpayers in the country from paying this unfair tax, as well as to extend the child tax credit and property tax deductions shows his commitment to fair and reasonable taxation on the neglected middle class.
In the interest of fair disclosure, I have served as Congressman Murphy's campaign treasurer since the beginning, and I am very proud to be associated with such a fine man and exceptional congressman.
Bristol Township, PA
As always, to help Patrick, click here (also, here is some more nonsense from Dubya on this issue).
And by the way, we’re still wondering what this guy is up to (tick tock, Mikey - a related post appears here).