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Tax Calculator - See How The Loss Of The Bush Tax Cuts Will Affect You

Tuesday, September 14, 2010 - 5:39 AM
From the Tax Policy Center:
The calculator is a tool to help you understand how current tax policy affects real families and what would happen if we changed that policy. With this version, you’ll be able to compare today’s law—with all of the 2001-2003 tax cuts still in place—against two alternatives to see how different taxpayers would make out.



4
Ken TuminKen Tumin5,468 posts since
Nov 29, 2009
Rep Points: 125,017
1. Thursday, September 16, 2010 - 8:44 PM
A reader emailed me about her concerned that the tax calculator is misleading. Below is an excerpt of her email. The WSJ article that she references is available here.
The Tax Policy Center uses an Alternative Minimum Tax Exemption Amount of $45,000 -for married couples filing jointly-- which is what it is today (the same as in 2001 when the law was enacted).   However, Congress has passed a patch for all years following 2001 and supposedly it was in President Obama's  budget for the current year.   One would expect the patch to be at least what it was in 2009 which was $70,950.   We still have until December 31 for Congress to get its act together and pass the patch.   Otherwise, as pointed out in the wsj.com article "Tax Wars" by Laura Saunders, 32 million will get hit paying AMT tax.   Depending on how high a couple's income goes it could be thousands of dollars.
 
The results given by the calculator therefore, I believe, are misleading since the patch has always been expected to be passed.   It might suggest that President Obama's plan offers a better deal than retaining the Bush tax cuts but no mention is made of the fact that the 2010 AMT exemption amount is unadjusted for inflation and that for the past 9 years, Congress has always passed a patch -- sometimes very late, but passed it nevertheless.   The Tax Policy Center should have had a side by side comparison using at least an amount the same as in 2009 - $70,950 with an explanation alongside it.

1
Ken TuminKen Tumin5,468 posts since
Nov 29, 2009
Rep Points: 125,017
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