Not true. My brother’s AGI this year is $407,000. His AMT is $10,393. Not a happy camper.
Nevermind. 
In 2015 I lost my job and had to draw from my IRA to pay my expenses (I am in my 40s). The amount I drew put me over the AMT threshold so I was charged. I have no problem paying my fair share, but its kind of ridiculous that under these circumstances I couldn’t avoid AMT. Just venting.
Ok Iglooo–you have come off the rails now. Do you even know what “Wall Street” does? Do you know what a stock represents? Do you know how corporations(which produce jobs) raise money? How they expand? How they fund growth? Do you have any clue how it all works? Is this an episode of South Park?
AMT was changed with the Reagan tax cuts. Not an oversight, not an unintended consequence, Congress changed it on purpose to flatten tax rates and reduce deductions. They lowered the income thresholds that triggered it with full intent.
So yes, the original AMT was put in place for a few dozen very rich taxpayers. But your Congress changed the intent and effect back in the 1980’s. Taxation with representation isn’t all that fun.
I was approximating. Don’t blame him for being unhappy though.
Depends on your definition of “wrong”, I guess. When a very targeted tax intended to do one thing morphs into a hot mess that winds up nailing millions of people who were never intended to be hit, to me that is wrong. If you set out with the goal of raising tax revenue by 2.0%, AMT as it currently exists is about the dumbest possible way you could do it.
Tax programs take on a life of their own though, and are very hard to kill. For example, the Federal Excise Tax of 1898, which was put in place to finance the Spanish-American War, that taxed long distance phone calls which were considered a luxury only the very wealthy could afford at that time. Phone service, of course, became ubiquitous and essential, so nearly everyone would up paying this tax. It lived until 2006.
^At least it started out taxing the wealthy. Cigarette tax on the other hand taxes mostly poor and not well educated. In our area, whenever we need money, people bring up increasing cigarette tax and feel very righteous about it.
^ I wouldn’t say “mostly”, but it is very true that poor and low educated people smoke at a much higher rate, so it is a very regressive tax.
But if you try adding a tax on expensive cars or low mpg vehicles or yachts or whatever, people lose their minds…
I knew plenty of poorer blue collar folks. For them, coming home and having a few beers and a cigarette was what they did for enjoyment. That is what made them happy. That is what they felt they could afford.
Sometimes their lives are lousy enough without throwing more taxes on those things they find that make 12 hr days tolerable.
Sometimes people suggest increasing the tax on cigarettes as a possible disincentive to smoke (probably doesn’t work) because when the poor get lung cancer they use a lot of healthcare dollars. Some have coverage under medicaid and should have mandatory coverage now, but many simply do not.
These taxes stay forever because even though the reason for them is long gone, they always find a use for them. Never give up on a “temporary tax”.
@DocT, congratulations! (late catching up here). How are you liking retirement? Are/were you a medical doctor?
Do some companies still offer traditional pension plans?
^ Yes but the number is dwindling. Only 18% of private-sector employees, and only 13% of non-union private sector employees, are covered by defined benefit pension plans. This is down from 35% in the 90’s.
Public employee coverage is much higher at 78%, an d67% of unionized private sector employees are covered. However, many public-sector pension funds are horribly unfunded and things are headed to a boil, see Illinois for example.
These numbers are from 2013 which was the most recent I could find with a quick search.
VaBluebird, when I hear of companies that offer traditional pension plans, it’s usually small companies that have tailored benefits to maximize them for principals. For example, a small law firm.
Most everyone else switched to cash value pensions. My wife and I both had traditional pensions, but they were frozen a couple of decades ago and converted. Newer employees get even less than we did.
ETA: cross posted with Notrichenough. The public sector pension funds are part of the “promise them whatever, but kick the can down the road” budget process.
@Iglooo and @jym626 Agreed that cigarette taxes should only be to reduce smoking. I saw a piece on Fox on how ridiculous NY is for raising the cig tax so high that revenues from the tax actually went down. “How stupid can NY be? Don’t raise the tax so high you lose revenue!!!” OK Fox. Nevermind that NY doesn’t want those tax revenues. They want people to stop smoking.
Wall Street doesn’t really get many “tax breaks”. Most of their tax breaks are obtained the old fashioned way: expenses, tax credits, losing copious amounts of $$. It amuses me when the news discusses some “tax break” Citi or BofA is taking. They both lost tons of $$ which is deductible from future income…you can have that tax break!
The hedge funds do get a carried interest exclusion, but they are all up in Connecticut! Perhaps you should rail against “Greenwich Avenue”!
The financial community benefits in a huge way, indirectly, with tax advantaged retirement accounts. There are more assets under management.
I think the term wall street isn’t always used as a geographic address.
Actually, they want both the revenue and for people to quit smoking, and they are getting neither. Smugglers buy cigarettes from states that have lower taxes, and smuggle them in. (Missouri tax on cigarettes is 17 cents per pack. Look it up.) At the retail level, cigarettes are then sold on the streets. Mayor DeBlasio ordered the police to crack down on that action. Ask Eric Garner how that worked out. Lots of unintended consequences.
Another revenue killer for NYC was the financial crisis. Hooray, bankers are getting laid off, and bonuses are being cut, and stretched out, and changed from mostly cash to mostly equity! Oops, what do you think funds NYC social services? When the people who pay the most tax get hit suddenly and hard, everyone gets hit suddenly and hard. That’s what a progressive tax code gets you.
We’ll have 2 pensions, and 2 social security payments at the high end of what’s available, and about half our assets in tax deferred accounts and half in taxable accounts. I think that means when we are eligible for Medicare we’ll have premiums that are pretty much through the roof. On the other hand, I saw the Explanation of Benefits notices for MIL and FIL’s final illnesses, and having the Medigap plan that makes all the bills go away is pretty nice.
Well, if you smoke, you probably won’t need to save or invest as much for retirement.