Are you ready for the AMT? That’s the Alternative Minimum Tax. The biggie in the “fiscal cliff” is this one.
It will it close to 27 million families. They are unaware of it. They have not budgeted for it.
If Congress decides to revoke it before January 1, the IRS will have to re-program its computers. Americans will not get their tax refunds early. They will have to wait for extra two months. Yet they count on these refunds.
The AMT will eat up next year’s tax refund — and then some.
The AMT will hit the middle class right between its collective eyes. The middle class will learn that there are no free lunches.
What will Congress do between now and January 1? Nobody knows.
Neither Obama nor Romney mentioned any of this, did he? That’s because it’s a bipartisan tax hike.
The voters will scream bloody murder. “Kick the can! Tax the rich!” That ancient ditty will be back in play. “Don’t tax you. Don’t tax me. Tax the guy behind the tree.”
When reality hits in the monthly withdrawal payment from salaries, the voters who work will stop spending this money. The people on the government’s many doles will start spending it. That’s Keynesianism in action. Keynesians never mention this.
Call it austerity. Your austerity. Not the government’s.
Have you factored this into your plans? Have to talked to your employer about what will happen to your take-home pay next January?
Have you sat down with Quicken to make your 2013 budget?
Which categories will “pick up the slack”?