For those of you that don’t know the Alternative Minimum Tax (AMT) is a tax originally intended for the very wealthy. Congress forgot to keep it updated for inflation and now as things stand 21 million Americans are set to be affected by it. The average tax bill increase would be $2,000 unless a patch is passed, according to Treasury Department estimates.
For the past few years in a row, Congress has come in and passed a patch that has offset the AMT and prevented most Americans from being affected. But this year, Congress has yet to pass a patch and the longer they wait the further the IRS will have to push back filing season due to software changes that would have to be made and thus delaying between 13-15 million refunds, and guess what one of those will probably be YOU.
To pass a patch this year would cost roughly 50 billion dollars. This is equivalent to putting bubblegum in a dam leak, it works for a little while but it just starts leaking again. Instead of coming down to the wire every year, Congress needs to just fix the AMT. Yes I know it’s complicated and yes I know it will be costly, really costly somewhere in the hundreds of billions range but it has to be done. Congress can not continue to keep passing these last minute patches and they can not toy with the timely delivery of a refund that every tax paying American if eligible is entitled to. Though, the longer they wait the longer that money sits, and consequently the more interest it makes. Now even 10-15% interest on that kind of money is a nice chunk of change. I am not saying anything but its something to think about in all this as this plays out.
All I know that if there was proper planning going on someone would have seen this and fixed this a long time ago before it ever became an issue. They have all these YouTube debates and stuff but what I really want to ask the candidates is “What are you going to do about the AMT?” The fact that they could let something like this happen and possibly let so many Americans be affected by this is ludicrous. Anyway that’s my two cents, “Hey Congress, Fix it already.
