The alternative minimum tax (AMT)The Alternative Minimum Tax (AMT) is a separate tax system that requires some taxpayers to calculate their tax liability twice—first, under ordinary income tax rules, then under the AMT—and pay whichever amount is highest. The AMT has fewer preferences and different exemptions and rates than the ordinary system. was first put into law in 1970 in response to a Treasury report that said 155 high-income individuals (income over $200,000) paid no income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. at all in 1967. The first year it was implemented was tax year 1970 and was technically called the “minimum tax.” The alternative minimum tax wasn’t officially instituted until tax year 1979. For a complete history of the AMT and the minimum tax, click here.
The following table provides a look at how the minimum tax hit tax returns among various income groups in 1970.
The Minimum Tax by Income Group in 1970 (first year of what became AMT)
| Income Group (AGI) | Number of Minimum Tax Returns | Minimum Tax | Average per Minimum Tax Return | Average per All Returns in Group | Total Number of Returns in Group |
| Under $10,000 | 0 | 0 | 0 | 0 | 44,592,946 |
| $10,000 – $14,999 | 0 | 0 | 0 | 0 | 14,852,506 |
| $15,000 – $19,999 | 0 | 0 | 0 | 0 | 6,104,264 |
| $20,000 – $49,999 | 2,127 | 3,550,807 | $1,669 | $0.87 | 4,071,406 |
| $50,000 – $99,999 | 5,689 | 11,609,270 | $2,041 | $30 | 385,872 |
| $100,000 – $199,999 | 5,603 | 22,247,777 | $3,971 | $295 | 75,342 |
| $200,000 + | 5,045 | 82,647,751 | $16,382 | $2,605 | 31,722 |
| Total | 18,464 | 120,055,605 | $6,502 | $1.62 | 74,286,993 |
Source: 1970 IRS Public Use File (may not exactly match published figures)
Note: All dollar figures and income groups are in 1970 dollars. According to CPI-U, $1 in 1970 = $5.20 in 2006.