They're hardly a family of fat cats: 13 children, a mother and father. The father is David Klaassen, a small town Kansas lawyer. But the IRS has been hitting this family with an extra tax designed to make the rich pay more, and they are fighting mad, reports CBS News Correspondent Ray Brady.
"I just don't want to be saddled with a tax that was placed on me accidentally . . . unintentionally," Klaassen says.
The tax weighing down on the Klaassens is the "Alternative Minimum Tax," put in by Congress to stop the wealthy from ducking taxes through exemptions, tax shelters and deductions. But, in Klaassen's case, it ballooned their $5,989 tax bill to nearly $10,000.
Klaassen knew about the Alternative Minimum Tax, but says he believed it was meant to cover the very rich and people with special tax shelters. Klaassen has no special tax shelters.
What Klaassen does have is income of nearly $90,000 - not really that much with 13 kids. And he had 15 exemptions for his family and himself, plus medical deductions, lots of them. His son Aaron is fighting cancer.
It was the medical deductions that set off alarm bells at the IRS. "If you have a medical emergency, it's time for the IRS to come penalize you with the Alternative Minimum Tax," Klaassen says.
Does this case in Kansas seem like an extreme? Well, take too many deductions for state and local taxes or medical expenses or the interest on a second mortgage, and you too could be hit with the Alternative Minimum Tax.
For married couples like the Klaassens, the tax can kick in when deductions and exemptions add up to more than $45,000 - a lot of money in the early 1980's when the tax went in, but it has not been adjusted for today's higher cost of living.
"So, now the Alternative Minimum Tax potentially captures or will affect many more taxpayers than it originally intended," says economist J. Carl Scholz.
Indeed, says Scholz, many of those are middle Americans who have never even heard of the tax, with more of them to come.
"Over the next 10 years, as many as 10-12 million families will be paying taxes under the Alternative Minimum Tax," Scholz says.
For Washington that spells money - an estimated $28 billion in added revenues by 2008. So, few lawmakers seem to be in a rush to change it.
But in Kansas, Dave Klaassen's on a one-man crusade to change the law.
Even though this tax was put in to make the wealthy pay more, some 2,000 Americans making more than $200,000 this year reportedly will pay Uncle Sam not one red cent - a bitter irony for Dave Klaassen and millions of middle class taxpayers.
©1999 CBS Worldwide Corp. All rights reserved
Copyright 1999 CBS. All rights reserved.
CBSNews.com staff CBSNews.com staff