am"t" here's a little primer on the alternative minimum tax (amt) for those of you who've never had to deal with it before. a long time ago some people clearly weren't paying their fair share of taxes. this was about 200 families. the "fix" was to add the amt to the tax code. it's not clear to me that the original amt closed whatever loophole was being exploited. it's also not clear that today's amt is the same as it was. i doubt both. anywho. this is how it more/less works today. amt is a parallel tax to regular tax. you have to calculate both. amt is supposed to ensure that you pay your fair share. fail. as you'll see. suppose your normal situation is your amt is $1000 less than your regular tax. this is normal for most people. though fewer and fewer every year. now suppose you work for an innovative startup company. the very thing that makes america great. startups don't have much cash. so they give employees stock in the company. or more specifically the option to buy stock at a really low price. the employee now has non-salary incentive to work 100 hours/week and make those options worth a fortune. these options vest on some schedule. after they vest you can exercise them. you write the company a check. and they transfer title to you. let's be clear here: you bought something. you made a purchase. you did not sell anything. no money came into your hands. you bought speculative wealth. if it's a public company you can sell immediately sell it. at which point everyone agrees you should pay taxes on this income. however, if it's a private company you can't. well technically, you can. as in are allowed to. but for the vast majority of companies, it's not possible in practice. anywho, this purchase of speculative wealth counts as income for amt purposes. let's say the option price is a dime and the fair market value is a dollar. you have to treat that $.90 difference per share as income for amt. so now your amt is say $10k higher than your regular tax. your tax due this year equals the greater amt amount. now, if our story ended there, that would be completely cool. but it doesn't. that difference counts as a $10k tax credit. next year, when your don't exercise options, you can claim some of it. $1k in our example. in other words, your regular tax is reduced to your lower amt. and your credit is reduced to $9k. this continues for 10 years until your credit has been consumed. okay. stop and think about that. you pay exactly the same amount of tax. the only difference is when you pay it. it's not a tax at all. it's a loan. the government is forcing you to loan it money. and it's using your future regular tax as collateral. which is just plain wrong. i don't like paying taxes. but i understand their value. i don't mind loaning money to the government. but i seriously object to giving the government a 0% interest loan. that just seems like an unreasonable seizure of my assets.  ¶ 8:00 AM