| Middle class tax relief is tax relief targeted mainly | | | | stocks, bonds, real estate, and small businesses |
| at the middle-income families. For helping middle | | | | that could be positively impacted by a lower |
| class families and to create job opportunities for | | | | capital gains tax. |
| this segment of the population, the U.S. Congress | | | | A controversial tax that affects the middle class |
| has approved and put in place major tax-relief | | | | is the Alternative Minimum Tax (AMT). The AMT, |
| programs. This is supposed to help millions of | | | | which was introduced as part of the Tax Reform |
| middle-income families, particularly families with | | | | Act of 1969, was primarily meant to tax high |
| children. The hope is that such a tax relief would | | | | incomes that enjoyed various exemptions under |
| enable them to keep their farms and businesses | | | | the mainstream tax system. However, lack of |
| within the family instead of being forced to use | | | | indexing to adjust for the effect of inflation has |
| them to pay heavy government taxes. In one | | | | resulted in the AMT becoming a tax penalty for |
| way, this is the government?s act of rewarding | | | | middle class families who live in areas with a high |
| families that have managed to save and build | | | | cost of living. Though families with annual incomes |
| businesses. | | | | less than $75,000 need not worry about the AMT |
| The broad-based capital gains tax relief proposed | | | | since the median household income in the U.S. as |
| by Congress is expected to not only encourage | | | | of 2005 is around $44,000, in some areas the |
| savings and economic growth but also provide tax | | | | $75,000 income figure might cross the AMT |
| relief to the middle class. This is because nearly | | | | threshold. This has wide implications for |
| two-thirds of tax returns reporting capital gains | | | | middle-class families, and demands for middle-class |
| tax are filed by people with annual incomes less | | | | tax relief often involve debates on the AMT. |
| than $50,000. These families own assets like | | | | |