Imponderables | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    The world is full of imponderables. We have been treated over the last year or so to a seemingly unending diatribe about the need for the wealthy to pay their fair share of taxes (whatever that is). Neither the Prez nor any of his sycophants has even tried to define "fair share". About all we can surmise is that whatever those folks are paying; it isn't enough - nor is it likely to be very soon. But maybe the Anointed One slipped up the other day when he said that the increase in the marginal tax rate included in the "Fiscal Cliff" legislation now had the so called rich paying their fair share. So maybe that issue is settled. But don't bet the farm on it.

    At the same time, we are told that the Alternate Minimum Tax (AMT) needs to be "fixed" - just as it has needed to be "fixed" many times since it was established. In their wisdom the tax writers who wrote the AMT into law apparently neglected to include a provision covering inflation. The result has been that as inflation has eroded the value of our earnings, while the (numerical) point at which the AMT "kicks in" has remained the same. The result has been that the number of folks whose income became subject to the AMT has increased. Folks who, when the tax was implemented, were nowhere near the threshold for the AMT to apply to them are suddenly subject to it. However, it must be noted that these folks typically tend to be in the higher income brackets and have a seemingly disproportionate amount of deductions and other tax preference items. br>
    But wait. Let's look at the AMT a little more closely. According to the IRS:

   The AMT applies to taxpayers who have certain types of income that receive favorable treatment, or who qualify for certain (sic) deductions, under the tax law. These tax benefits can significantly reduce the regular tax of some taxpayers with higher economic incomes. The AMT sets a limit on the amount these benefits can be used to reduce total tax.

   The AMT tax is in addition to the "regular" income tax. After the "regular" tax is computed, there is another computation required that determines the amount of the AMT tax owed (if any) and adds that amount to the "regular" tax to arrive at the total tax owed. What the AMT was intended to do is keep those with relatively high incomes and a lot of "deductions - and other tax preference items" from escaping the payment of taxes. Maybe it has worked too well. I rather suspect many politicians are beginning to get hit with an AMT amount on their tax return, thus the willingness to "fix" it. Even the Prez had to pay AMT (for the first time) in his 2010 return.. Surely that has nothing to do with his seeming willingness to "fix" the AMT. As an aside, it has never been clear why the Congress took so long to generate a "permanent" fix - which they have done in the Fiscal Cliff legislation. simply by adding am "inflation" provision. (But I digress. That's another subject for another day.)

    The unanswered question that remains is: If we are trying to get higher income (so called rich) folks to pay a "fair share" why it took so long to permanently fix the AMT that was designed to do that very thing. Is it about "fairness" or is it about the Prez wanting to create the impression that he is looking out for the folks (i.e. the middle class).. No, wait!! That's Bill O'Reilly who does that, not the Prez. Or maybe the Prez is trying to create an environment where class warfare will prevail. In the meantime it certainly is clear that the Prez is looking out for his union supporters, environmental zealots, "bundlers", and big campaign contributors as part of his approach to "crony capitalism". It isn't clear just how the so called "uninformed" fit into this scenario. It would seem that many of these folks have long since overcome the shame of living on government handouts and continue to support the Anointed One. Their interest in other Government activities seems to lie somewhere between apathy and lethargy - except when David A. gets them to turn out to vote, even though not many of them seem to have any idea what they are voting for (or against). Please don't accuse me of fomenting "class warfare". The anointed one and his henchmen have already done that with their continued denigration of the successful in our population.

    Here's another imponderable. Why is it that politicians interpret "temporary" as having a beginning but no end?? Take the so called Bush Tax Cuts. They were enacted as a temporary (there's that word again) measure (in 2001 and 2003) to help the economy. They were originally scheduled to expire in 2010, but guess what. In 2010 there was a two year extension. So here we are two more years later ready to extend all or part of them - again..A lot of imponderables here, not the least of which is: "How did we let this thing slip up on us this way??" Short answer: It didn't sneak up on us. We knew about it all along and have simply been ignoring it; perhaps in the irrational hope it would go away...No such luck. So here we are at the "fiscal cliff".

    One more imponderable. The legislation which helped us avoid the "fiscal cliff" took less than 9 pages to do away with the Bush Tax cuts which have been at the center of the fiscal cliff controversy. They negotiated higher marginal tax rates on the rich and made permanent the marginal rates applicable to the great middle class. That task was taken care of by VP Joe Biden and Mitch McConnell in about two days of negotiation. My download of the legislation was 56 pages long. How those other 47 Pages materialized in the brief time the negotiations lasted is certainly another imponderable. Unless, of course the GOP got outfoxed - again. Hmmm... Do you suppose the Dems had all those other "goodies" on the shelf just waiting for a bill to which they could be attached?? If it quacks like a duck and waddles like a duck...

    And in Friday's news (12/28) we are told that by our illustrious 3rd District Representative that if congress had taken care of this problem earlier, we would not now be faced with the prospect of going over the fiscal cliff... Really??

    D'ya think.