AMT (Alternative Minimum Tax)

[Farmersfan]

Anyone have any significant insight into the AMT. A lot of people like to throw around facts and figures about how the wealthy are getting all the breaks in this country so i would like to get a little feedback on how you justify the AMT. The AMT is basically a tool used by the IRS to ensure anyone who makes over 150K a year pays at least 26% income tax. I think most of us making under 150K actually paid less than 10% actual income tax rate after all deductions were said and done. That's a pretty big disparity in tax burdens. What say you?

[JasperDog94]

I say flat tax. Everyone pays the same percentage. No discrimination on sex, age, ethnicity, income or anything else you can think of. The flat tax makes perfect sense...and this coming from a guy that would pay more in taxes with a flat tax.

[Farmersfan]

Originally posted by JasperDog94
I say flat tax. Everyone pays the same percentage. No discrimination on sex, age, ethnicity, income or anything else you can think of. The flat tax makes perfect sense...and this coming from a guy that would pay more in taxes with a flat tax.


I'm thinking most of us would pay more in a flat tax situation. but I agree it would be worth it.

[JasperDog94]

Originally posted by Farmersfan
I'm thinking most of us would pay more in a flat tax situation. but I agree it would be worth it. The flat tax is so simple. Everyone pays. I'm a firm believer in that if you get something then you need to give. That's why I have a big problem with our current tax code. Some people never pay into the system, yet they receive benefits most of their life. Somethings wrong with that.

[Farmersfan]

Originally posted by JasperDog94
The flat tax is so simple. Everyone pays. I'm a firm believer in that if you get something then you need to give. That's why I have a big problem with our current tax code. Some people never pay into the system, yet they receive benefits most of their life. Somethings wrong with that.


I think we should look at a national Sales tax. that way people would have a benefit to save money. If you save your money you don't pay taxes on it. If you buy something you pay a federal sales tax. So the rich pay when they spend money and the poor pay when they spend money. No exceptions.(except maybe food).............
And it doesn't not impact state or local sales taxes at all. It is over and above those taxes....

[Txbroadcaster]

I would LOVE a flat tax..or national sales tax..but we have been in this system for so long to change like that would cause alot of problems in fields such as Real Estate and such

[ronwx5x]

Originally posted by Farmersfan
I think we should look at a national Sales tax. that way people would have a benefit to save money. If you save your money you don't pay taxes on it. If you buy something you pay a federal sales tax. So the rich pay when they spend money and the poor pay when they spend money. No exceptions.(except maybe food).............
And it doesn't not impact state or local sales taxes at all. It is over and above those taxes....

If a national sales tax did indeed promote savings, would this not in affect cause a decline in purchases, further damaging our economy? If so, would it not cause a decline in tax revenue, justifying in some politicians minds, a need to increase that tax? I well remember when Texas instituted a sales tax. It started at a very low amount, around 2%. Today, at least in most cities, it is 8.25% and still does not promote savings. Makes me wonder how well a national sales tax would promote savings!

As to a flat tax, the big problem I see is in municiapalities who issue tax-free bonds, allowing them to borrow money at a much lower rate than the federal government or corporations. If we had a flat tax, that lower rate would have to increase to market rates, thus causing our taxes to increase to pay for essential services.

I really believe total taxes would increase in both scenarios above. I'm certainly not an expert in taxation, though.

[Farmersfan]

Originally posted by ronwx5x
If a national sales tax did indeed promote savings, would this not in affect cause a decline in purchases, further damaging our economy? If so, would it not cause a decline in tax revenue, justifying in some politicians minds, a need to increase that tax? I well remember when Texas instituted a sales tax. It started at a very low amount, around 2%. Today, at least in most cities, it is 8.25% and still does not promote savings. Makes me wonder how well a national sales tax would promote savings!

As to a flat tax, the big problem I see is in municiapalities who issue tax-free bonds, allowing them to borrow money at a much lower rate than the federal government or corporations. If we had a flat tax, that lower rate would have to increase to market rates, thus causing our taxes to increase to pay for essential services.

I really believe total taxes would increase in both scenarios above. I'm certainly not an expert in taxation, though.



I'm thinking the initial impact would decrease sales but once people were able to create a "Substantial Savings" they would start purchasing again. the difference would be they would purchase with cash instead of credit. Credit cards and charge accounts are the main reason middle to lower class Americans remain middle to lower class IMHO!!!! Paying the minimum monthly payment on a revolving credit account is the least financially sound thing a person could do. Yet millions do it their entire life. And saving is contagious. Once you see that account accumulating it becomes much easier to add to the pile. More than 3/4 of Americans live from pay check to pay check while making car payments, house payments, boat payments, child support, and ton of other monthly payments and any excess they might come up with rushed to the Best Buy for that new CD player.....

[ronwx5x]

Originally posted by Farmersfan
More than 3/4 of Americans live from pay check to pay check while making car payments, house payments, boat payments, child support, and ton of other monthly payments and any excess they might come up with rushed to the Best Buy for that new CD player.....

Sounds like my grown children! Truthfully, I am concerned that such a huge change in how we are taxed opens up a whole new can of worms. Some fine "expert " would figure how to use the new law to get in your and my pockets.

[Farmersfan]

Originally posted by ronwx5x
Sounds like my grown children! Truthfully, I am concerned that such a huge change in how we are taxed opens up a whole new can of worms. Some fine "expert " would figure how to use the new law to get in your and my pockets.


It has become the NEW American way!!!! Live for years under a ton of debt and then declare bankruptcy and start all over again. A huge part of our economy is based on financial failure of Americans. The Banking industry use to be for the support and service of average Americans and now they have evolved into entites that dwell on the failures of the average American. Not only dwell on the failure but they encourage it. They offer overdraft protection as a service and get away with charging 1000s of percentages of interest for the protection. You overdraft your account by 1.00 and you get charged a 35.00 fee. I think that equates to a 3500% interest rate on that 1.00 they loan you to keep your account positive. And our government allows it. Most banks make more money on fees from credit accounts and failures than they ever could from normal banking practices. But I disgress into another area of great sadness in this country......

[I_Do_Care]

Originally posted by Farmersfan
It has become the NEW American way!!!! Live for years under a ton of debt and then declare bankruptcy and start all over again. A huge part of our economy is based on financial failure of Americans. The Banking industry use to be for the support and service of average Americans and now they have evolved into entites that dwell on the failures of the average American. Not only dwell on the failure but they encourage it. They offer overdraft protection as a service and get away with charging 1000s of percentages of interest for the protection. You overdraft your account by 1.00 and you get charged a 35.00 fee. I think that equates to a 3500% interest rate on that 1.00 they loan you to keep your account positive. And our government allows it. Most banks make more money on fees from credit accounts and failures than they ever could from normal banking practices. But I disgress into another area of great sadness in this country...... You should see how many of these kids on campuses get credit card offers, insane! I see these things laying around the University everywhere. I think most have become smart about it, but I have a colleague who ran a survey to find out the success rate of this marketing technique and it was absurd, not only that but what they are used for! From small expenditures that Loans, scholarships and grants don't cover to SPRING BREAK! LOL

[Farmersfan]

Originally posted by I_Do_Care
You should see how many of these kids on campuses get credit card offers, insane! I see these things laying around the University everywhere. I think most have become smart about it, but I have a colleague who ran a survey to find out the success rate of this marketing technique and it was absurd, not only that but what they are used for! From small expenditures that Loans, scholarships and grants don't cover to SPRING BREAK! LOL


How many of these kids default on these debts? I would guess the number is huge. So why would the credit company continue to offer them?????? It's because the credit companies actually benefit from a default. A 1000.00 defaulted debt will soon be turned into a 4000 or 5000 debt with fees and penalties. They write off the 1000. as a bad loan and sell the 5000. debt for 25 cents on the dollar. So they have in effect loaned you 1000 dollars, gotten the original 1000 back from a collection agency and taken 4000 deduction from government obligations for the bad loan.....I don't know for sure that this is the exact way it works so someone who does know can correct me.

[I_Do_Care]

Originally posted by Farmersfan
How many of these kids default on these debts? I would guess the number is huge. So why would the credit company continue to offer them?????? It's because the credit companies actually benefit from a default. A 1000.00 defaulted debt will soon be turned into a 4000 or 5000 debt with fees and penalties. They write off the 1000. as a bad loan and sell the 5000. debt for 25 cents on the dollar. So they have in effect loaned you 1000 dollars, gotten the original 1000 back from a collection agency and taken 4000 deduction from government obligations for the bad loan.....I don't know for sure that this is the exact way it works so someone who does know can correct me. You just asked an excellent research question, and I'll ask my buddy about that, he's an expert on this credit formulated wealth stuff, interesting, but down right DRY reading. LOL

[ronwx5x]

Originally posted by Farmersfan
How many of these kids default on these debts? I would guess the number is huge. So why would the credit company continue to offer them?????? It's because the credit companies actually benefit from a default. A 1000.00 defaulted debt will soon be turned into a 4000 or 5000 debt with fees and penalties. They write off the 1000. as a bad loan and sell the 5000. debt for 25 cents on the dollar. So they have in effect loaned you 1000 dollars, gotten the original 1000 back from a collection agency and taken 4000 deduction from government obligations for the bad loan.....I don't know for sure that this is the exact way it works so someone who does know can correct me.

I repaid every dime of my college loans and never owned a credit card. Must be a generational thing. I never realized I should just walk away from college debts!

Wish I could say the same thing about my children. Hopefully I'm done bailing them out now. If I could only keep my spouse from buying them things I could probably pay off the house. Not long ago one needed a mattress and box spring so the next thing I knew we were buying a set for ourselves (and not really needed) so we could give the old ones to them. Same thing with a sofa. At least we got some new stuff out of the deal! LOL or COL?

[Farmersfan]

Originally posted by ronwx5x
I repaid every dime of my college loans and never owned a credit card. Must be a generational thing. I never realized I should just walk away from college debts!

Wish I could say the same thing about my children. Hopefully I'm done bailing them out now. If I could only keep my spouse from buying them things I could probably pay off the house. Not long ago one needed a mattress and box spring so the next thing I knew we were buying a set for ourselves (and not really needed) so we could give the old ones to them. Same thing with a sofa. At least we got some new stuff out of the deal! LOL or COL?


May be time to put your foot down! Time to step up and take the bull by the horns! Muster up some testicular fortitude.........

and ask your wife to PLEASE quit that!!! :D :D :D

[Txbroadcaster]

Originally posted by ronwx5x
I repaid every dime of my college loans and never owned a credit card. Must be a generational thing. I never realized I should just walk away from college debts!



Not repaying school loans now is not as easy as it once was because SO MANY from the 70's and 80's did simply NOT pay their school loans back so now they are pretty aggresive in getting the money back