{"id":2196,"date":"2009-11-19T15:30:23","date_gmt":"2009-11-19T20:30:23","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=2196"},"modified":"2009-11-19T18:43:06","modified_gmt":"2009-11-19T23:43:06","slug":"health-care-taxes-as-the-new-amt","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/2196\/health-care-taxes-as-the-new-amt\/","title":{"rendered":"Health Care Taxes as the New AMT?"},"content":{"rendered":"

The recently passed<\/span><\/a> House health care bill contains a plethora of tax hikes<\/span><\/a> that would make any nanny-state liberal smile with appreciation.<\/p>\n

Perhaps the biggest tax hike, in terms of revenue generation, is the new surtax on \u201chigh-income\u201d earners.\u00a0 However, even most Democrats realize that any new tax on income (amounts over $500,000 and $1 million) must be indexed for inflation to avoid hitting middle-class taxpayers.<\/p>\n

If not, taxpayers could experience “bracket creep” similar to the Alternative Minimum Tax (AMT)<\/span><\/a>,\u00a0the inception of which was meant to target literally a few dozen millionaires, but could soon affect over 30 million taxpayers.\u00a0 If income thresholds don’t change, in the year 2060 a $500,000 annual income won’t be rich but taxpayers will still have to pay both the AMT and the health care surtax.<\/p>\n

For example, without changes, the CBO now estimates<\/span><\/a> that \u201cthree-quarters of households would pay the AMT.\u201d\u00a0 The math for the potential surtax is just as frightening.<\/p>\n

BlackBook Legal\u2019s<\/span><\/a> Sam Greenberg does the math on the new health care surtax and it\u2019s not pretty.\u00a0 Eventually, the 5.4% surtax could end up hitting millions of households.\u00a0 Even if wages grow at the same rate as inflation (unlikely unless the economy continues to stagnate), the surtax will end up hitting at least 5 times as many households as was intended by House leaders.\u00a0 Greenberg concludes, \u201cA non-inflation linked tax is a convenient way to pass future tax hikes without any legislative action.\u201d<\/p>\n

This is just another unintended consequence of federal tax policy.\u00a0 For those who remain confident that the surtax will eventually be indexed to avoid middle-class taxpayers, just look at the AMT.\u00a0 Of course, when tax time arrives, you won\u2019t have to look for it; the AMT will find you<\/span><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The recently passed House health care bill contains a plethora of tax hikes that would make any nanny-state liberal smile with appreciation. Perhaps the biggest tax hike, in terms of revenue generation, is the new surtax on \u201chigh-income\u201d earners.\u00a0 However, even most Democrats realize that any new tax on income (amounts over $500,000 and $1 […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[520,440,40,12,449,105],"class_list":["post-2196","post","type-post","status-publish","format-standard","hentry","category-posts","tag-alternative-minimum-tax","tag-cbo","tag-congressional-budget-office","tag-health-care","tag-surtax","tag-tax"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/2196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=2196"}],"version-history":[{"count":5,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/2196\/revisions"}],"predecessor-version":[{"id":2210,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/2196\/revisions\/2210"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=2196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=2196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=2196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}