NAEA Takes on Outdated Tax Provisions
The National Association of Enrolled Agents (NAEA), the organization that powers America's tax experts, has announced its intent to focus its advocacy efforts on tax code provisions in desperate need of reform. The association intends to work with other interested stakeholders in requesting that Congress address this important issue.
- The AMT was set in the late 1960s to catch high-income individuals who did not pay any income tax.
- Today, taxpayers who itemize deductions and are subject to the AMT lose their deductions for state and local income and property taxes, among other benefits.
- Even though the original AMT went after the tax shelters of the very wealthy, today's AMT targets the automatic deductions of the middle class.
- If the AMT was not indexed annually by special acts of Congress, it would hit tens of millions of taxpayers.
- Section 86, which addresses the taxability of Social Security benefits, is not indexed.
- Income thresholds above which Social Security benefits become taxable were set twice, once in the early 1980s and once in the early 1990s, and then never revisited. This has resulted in a much higher percentage of Social Security benefits that are taxable, effectively increasing taxes for many seniors on fixed incomes.
- In light of inflation that has occurred in the last twenty years, adjustments to the base amounts are long overdue.