Two Great Reads: AMT and...

Two great articles that I would like to share with my loyal readership:

1. http://online.wsj.com/article/SB126429047014334331.html

This Q & A tackles Congresses' 2010 position on the AMT tax. The AMT is an important agenda item for this blog, as I believe that it is an issue that deserves much more attention on Capitol Hill. This tax is not indexed for inflation, thus more and more taxpayers find themselves caught in an AMT bear-trap each year. Of course, the additional generated revenue in the back pockets of DC bigwigs likely means the AMT will never go away -- however, when considering its purpose, I believe that some sort of indexing should be lobbied.

2. http://www.usatoday.com/money/perfi/taxes/2010-01-26-irs-corporate-tax-breaks_N.htm

Though this article pertains mostly to corporate deductions, I find it interesting enough to share in this space. It appears the corporations and the IRS are headed toward a standoff as to disclosure of "gray-area" deductions. As we have found through the fallout of the near collapse of the Wall Street investment banking industry (re: Bear Sterns, AIG), the newest trend in regulation is full disclosure of such hot topics as executive bonuses. Loading up on deductions could be a tool utilized by big corporations to keep their bottom-line healthy -- and if increased disclosure is being demanded here, I'm sure a similar push-back will follow.

As for how these two articles relate to our target audience (recent college graduates ages 18-30) ...

1. Although the AMT may not come in to play for several years, it is important to become familiar with it now. If it remains not indexed for inflation, many young Americans may find themselves in this trap sooner than they may think!

2. Increased regulation is back on the front-burner in terms of corporate governance. But much like a fox always finds a new way to get into the chicken house, corporations are seeking new ways to meet and exceed market expectations. Being familiar with this new development is a healthy way to learn about future issues we may face as potential young investors in these publicly-held corporations.

Thanks for reading Mass Tax-ed, and expect another post soon with follow-up and analysis of President Obama's State of the Union.