tag:blogger.com,1999:blog-8733774014277102868.post3282091578600031232..comments2021-02-18T08:02:51.087-05:00Comments on 'Bank Slate: FBB Part 2: Taxesswainhttp://www.blogger.com/profile/08696058464538049417noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-8733774014277102868.post-38748653390955803432010-03-03T17:22:43.597-05:002010-03-03T17:22:43.597-05:00The AMT itself is fairly simple. The problem is yo...The AMT itself is fairly simple. The problem is you always have to calculate it on top of doing your taxes the normal way (which is not so simple).<br /> <br />Generally, I agree that creating tax policy with fixed numbers that don't adjust for inflation is pretty dumb. But recently the Fed. Govt. has been pretty good about managing inflation. And they've been really bad at balancing the budget. Given the political and public reluctance to increase taxes, if your serious about reducing the deficit, the short-term risk of congressional tinkering is worse than the risk of a little AMT neglect.swainhttps://www.blogger.com/profile/08696058464538049417noreply@blogger.comtag:blogger.com,1999:blog-8733774014277102868.post-85989541037674023872010-03-03T16:17:57.653-05:002010-03-03T16:17:57.653-05:00Simple it is not. As the linked article suggests,...Simple it is not. As the linked article suggests, it may be simple when you elect not to itemize deductions, which is not very common if you are a homeowner, for example. Moreover, the problem is that it is very difficult to predict when, say, you are looking to buy a house, what portion of your mortgage interest will be deducted -- and it will change depending on your income. So, the effect of inflation makes home ownership more expensive each year for more and more people at lower and lower income levels when inflation is considered, so that you might be unexpectedly paying more for your house in year 10 or 20 than you were in year 1. Anyway, it is not a terribly bad problem to have to pay some amount of AMT now, which we have done for a couple of years, but it can disturb settled expectations when you try to plan ahead by the rules. A universal flat tax without the deductions (i.e., social engineering), would be better than the AMT without inflation adjustment. It doesn't really matter at what level the AMT bar is set, as long as it is inflation-adjusted. So, for example, set it at 200K (or 100K or whatever is necessary/fair), but we SHOULD adjust for inflation to allow for people to plan ahead to a reasonable degree.Anonymousnoreply@blogger.com