The AMT tax will effect many normal people in the near future. It is assessed on top of your regular tax if their formula determines you have too many legal deductions. Since it is not indexed for inflation, more and more people will 'qualify' for it until they change it. Things like having a lot of children or living in a high income tax state can trigger it at suprisingly low levels. I have had to jump through hoops to avoid it myself, but I won't be able to for 2007 and beyond. It was originally written to target a couple hundred of the UberRich.

Bob


>I don't really understand the details of the AMT. I know it was featured prominently in the news back in the dotcom bust days. Something about paying taxes on stock options based on the price of the option vs. the market price of the stock the day the option was excercised.
>
>There were many stories of people who had excercised options and had yearly incomes of 50-70k. They ended up with 300k tax bills.
>
>I think there are similar stories today. But I'm not sure what triggers the hugh AMT assesment.
>
>>There's good and there's the bad:
>>
>>http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071024%5cACQDJON200710242253DOWJONESDJONLINE001107.htm&
>>
>>A small section:
>>
>>Middle and upper-middle income families would benefit under the plan by a repeal of the alternative minimum tax starting Jan. 1, 2008.
>>
>>Upper-income families, however, would pay for that repeal with a 4% surtax on incomes above $150,000 for a single earner or incomes above $200,000 for a married couple. That surtax would grow to 4.6% for incomes above $500,000.
>>
>>The surtax will also make possible an expansion of the earned income tax credit, an increase in the standard deduction, and an increase in the value of the child tax credit for those earning too little to owe federal income taxes.
>>
>>A third section of the plan would address a number of pressing tax issues, including a temporary patch of the alternative minimum tax prior to Jan. 1, 2008, and the extension of a number of expiring tax provisions.
>>
>>Absent a patch, the alternative minimum tax will expand to hit roughly 25 million taxpayers, up from 4.4 million in 2006, increasing their taxes by a total of nearly $50 billion, according to congressional estimates.
>>
>>
>>And a Republican rebuttal:
>>http://republicans.waysandmeans.house.gov/News/PRArticle.aspx?NewsID=133