Alternative Minimum Tax

The original role of the Alternative Minimum Tax, introduced in 1969, was to prevent a small group of high-income taxpayers from combining so many deductions and exemptions that they owed little or no income tax.

The AMT identifies taxpayers who have taken “excessive” advantage of legal tax breaks and forces them to re-calculate their income tax. They must add back in some of the previously untaxed income, take a special AMT exemption and pay tax on this new definition of taxable income at different rates.

In theory, the AMT serves as a tax backstop, taxing income that would have escaped taxation. Recently there have been calls for AMT reform, but the key to reforming it lies in the regular tax code: curtailing the myriad exclusions, deductions, exemptions, and credits in the code would make it possible to expand the tax base and raise the same revenue with lower tax rates.


Related Articles

Effects of Allowing Filers the Option of Filing Under an Optional 23 Percent Flat Tax

November 9, 2007

Effects of Allowing Filers the Option of Filing Under an Optional 24 Percent Flat Tax

November 9, 2007

Democratic Ways & Means Approves Revenue Neutral AMT “Patch”

November 2, 2007

A State-by-State look at Rangel’s “Mother of All Tax Reforms” Bill

October 29, 2007

Farewell AMT, Hello Surtax?

October 26, 2007

The Imminent AMT Fiasco

October 25, 2007

Kinsley Offers Criticism But No Solution to AMT Pickle

October 20, 2007

AMT Patch Appears Likely; “Pay For” Is Uncertain

October 17, 2007

New York City Metro Area Hit Hardest by AMT

September 25, 2007

Impact of the Alternative Minimum Tax (AMT) by Congressional District, 2005

September 24, 2007

Impact of the Alternative Minimum Tax (AMT) by Major City Areas, 2005

September 24, 2007

Impact of the Alternative Minimum Tax (AMT) by County, 2005

September 24, 2007

Who Is Middle-Class According to Politicians? Everyone, of Course!

July 27, 2007

Millionaires Would Love to Be in AMT

July 26, 2007

Questions and Answers on the Alternative Minimum Tax

July 21, 2007

Nixon Treasury Originally Opposed AMT

July 20, 2007

RFK Was Early Proponent of Minimum Tax (AMT)

July 18, 2007

Impact of the Alternative Minimum Tax (AMT) by State, 2005

July 18, 2007

How Is Our Income Tax Unfair?

July 17, 2007

Burman and Hassett Tell It Like It Is on AMT Before Finance Committee

June 28, 2007