The AMT: What's Wrong and How to Fix It

The alternative minimum tax (AMT) is a complex, unfair, and inefficient shadow tax system that threatens to affect 32 million taxpayers by 2010, many of them solidly middle class. Under current law, repealing the AMT without offsets would cost more than $850 billion through 2017. This paper summariz...

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Bibliographic Details
Published in:National tax journal 2007-09, Vol.60 (3), p.385-405
Main Authors: Burman, Leonard E., Gale, William G., Leiserson, Greg, Rohaly, Jeffrey
Format: Article
Language:English
Subjects:
Alternative minimum tax
Capital gains
Impact analysis
Income taxes
Itemized deductions
Laws, regulations and rules
Marginal tax rate
Minimum tax
State income tax
Studies
Tax deductions
Tax exemptions
Tax liabilities
Tax rates
Tax reform
Taxable income
Taxpaying
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Summary:The alternative minimum tax (AMT) is a complex, unfair, and inefficient shadow tax system that threatens to affect 32 million taxpayers by 2010, many of them solidly middle class. Under current law, repealing the AMT without offsets would cost more than $850 billion through 2017. This paper summarizes the current and projected effects of the AMT and considers options to finance repeal. One attractive option we consider would be to combine AMT repeal with a four percent tax on AGI in excess of $200,000 for married couples and $100,000 for others.
ISSN:0028-0283
1944-7477
DOI:10.17310/ntj.2007.3.03