Lexington Leader (Lexington, Tex.), Vol. 11, No. 504, Ed. 1 Thursday, December 6, 2007 Page: 10 of 20
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Page 4B - Thursday, December 6, 2007
LEXINGTON LEADER
What the “Alternative Minimum Tax” Really Means for Texas Families
by Senator Kay Bailey
Hutchison
Albert Einstein once remarked,
"The hardest thing in the world to
understand is the income tax."
Since Einstein's admission, our tax
code has only grown more com-
plicated and now it is poised to
force 20 million middle class
Americans to pay an extra $65 bil-
lion in taxes over the next four
years. And if the tax cuts of 2003
expire, a staggering 115 million tax-
payers will be hit with a$1700tax
increase. One of the most press-
ing domestic priorities facing this
extended Congress is passing leg-
islation to address the alternative
minimum tax (AMT) that will slap
millions of Americans including
732,000Texas families - with new
taxes.
Although many Americans may
not be focused on tax day just yet,
the ears of most tax-payers perk
up at the words "alternative" and
“minimum” used along with "tax."
By its name, many taxpayers might
assume the AM T is a good thing.
A simpler "alternative" to the com-
plicated and overly burdensome
tax code would be welcome news.
The idea of paying a lesser or
"minimum" amount of taxes
sounds good, too. But the AM T
is not simpler and it does not al-
low taxpayers to pay lower taxes.
To the contrary, the AMT de-
nies taxpayers many important
deductions, so that middle class
families subject to AMT actually
pay higher taxes. To make matters
worse, Congress failed to index the
AMT for inflation. So the AMT
has not been adjusted to keep
pace with the rise in income and
cost of living. As a result, a tax
that affected less than 369,000 tax-
payers in 1994 could impact an
additional 20 million taxpayers who
will be burdened with an unex-
pected tax increase next April un-
less Congress enacts a refund fix
this year.
If Congress does pass a tax re-
fund fix, a Texas family earning an
income of $75,000, and paying
$6,000 for day care for their four
children, would itemize their child
care deductions and receive a
$6,189 refund. Without this fix.
however, the family would receive
only a $700 refund. That’s nearly
a $6.(XX) difference. Even if the tax
refund fix is enacted. Congres-
sional inaction to date could de-
lay the family's refund until June -
a delay that many working fami-
lies cannot afford.
Similarly, with a tax refund fix, a
single parent earning $50,000 a
year, paying $6,000 annually for
day care, and using standard de-
ductions on her tax return, would
receive a return of nearly $1,000.
But if Congress continues to ig-
nore the AM I problem, she would
actually owe the IRS an additional
$225 in taxes. A tax refund fix
would save her and her family a
total of $1,189.
Unfortunately, even if Congress
passes a bill, we can expect prob-
lems. Months ago, Treasury Sec-
retary Henry Paulson warned that
any bill to fix the AMT would
need to be sent to the President
by November 16, allowing the IRS
sufficient time to prepare and dis
tribute instructions and update
their computers to process tax re-
turns next April. Many families'
tax refunds may be delayed up to
2 to 3 months because the tax
forms will not be ready in time for
tax season. This will affect Texas
families who take popular deduc-
tions and credits - including the
child care credit, the adoption
credit and the dependent care
credit.
If Congress fails to act alto-
gether. the AMT impact will be sig-
nificant. Without a tax refund fix.
the AMT will dig deep into the
pockets of hundreds of thousands
of families in Texas, who stand to
lose $1,000, $2,000, $5,000, or more.
Congress must act responsibly,
and correct the AMT, which now
threatens to encroach on the earn-
ings of millions of middle class tax-
payers.
Pioneer Festival of Lights
Satu
Dec. 8
LEXIN
Thursd
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Brought to Lexington again
by our Friends at
OUND TOP
STATE 7)
• Santa turns on the Tree of Lights at the Lexington
Log Cabins at 5:30 p.m.
• Pictures with Santa at the Cabins for a $5 donation or
for an unwrapped toy. /Ml proceeds go to the Lexington
Blue Santa Project.
• Sausage Wraps and Delicious Chili.
it Cookies and Hot Cocoa tool
£ And very special performances
by local choirs.
by Scott I
The JV
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Prescribed
Burning
Workshop
The Texas Parks and Wildlife
Department District staff along
with the Lee County Wildlife As-
sociation will hold a Prescribed
Burning workshop on Saturday
December 8th, beginning at 8:30
a.m.. at the property of Greg Pleas-
ant 1757 CR 121 between Giddings
and Dime Box off FM 141.
The workshop is designed to
give landowners and managers a
basic understanding of the use
and application of prescribed fire
in a wildlife and grazing manage-
ment program. Topics will include
planning the burn, fire weather
and safety, the role of fire in veg-
etation management, fire line
preparation, suppression equip-
ment and smoke management.
Participants will conduct a burn if
conditions permit.
Prescribed Burning is an excel-
lent tool for wildlife habitat man-
agement and brush control. Come
out and see how it can be used
safely.
Lunch and drinks will be pro-
vided by the Lee County Wildlife
Association. Participants will
need to bring leather gloves,
leather boots and cotton outer-
wear.
There is no charge for the work-
shop. Please let us know if you
are coming: Greg Pleasant TPWD
Biologist 979-540-2744.
Come out and Enjoy an
Evening of
Family Fun and Entertaiment!
Me
ristmas!
V-
ADVERTISE
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Terrell, Cindy. Lexington Leader (Lexington, Tex.), Vol. 11, No. 504, Ed. 1 Thursday, December 6, 2007, newspaper, December 6, 2007; Lexington, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1665842/m1/10/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Giddings Public Library and Cultural Center.