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Joe Sixpack Gets Shock From IRS: "Rich Man's Tax' Not Just For Rich.(ISSUES & INSIGHTS)(NATIONAL ISSUE)
Byline: Brian Mitchell
Lewis Luckenbach's client made a decent living: $90,000 in 1999. But he wasn't what you'd call rich -- except by IRS standards.
A tax accountant in Sugar Land, Texas, Luckenbach used all the deductions the law allowed. That got his client's 1999 federal income tax down to just $8,107.
Too low, said the IRS. Too many of the wrong kinds of deductions. Time for the Alternative Minimum Tax. Pay us another $795.
"I had never seen it hit that low," Luckenbach said. "He had the wrong combination of everything."
It's happening more and more. Honest taxpayers with incomes as low as $50,000 are getting hit with a tax meant to make sure "the rich" pay their fair share.
In 1990, the AMT took more money from 132,000 taxpayers. In 2000, it leeched more out of 1.3 million. That's a tenfold increase, and we'll see it again in another ten years.
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