Should the AMT replace the regular income tax? Q.Should the AMT replace the regular income tax? A.The notion that taxpayers should not have to calculate their tax liability twice—once for the regular tax and again for the alternative minimum tax (AMT)—has merit. It is less clear that making the AMT the only income tax in town would improve the tax system’s efficiency, simplicity, or fairness. Briefing Book page Read more about Should the AMT replace the regular income tax?
What is the AMT? Q.What is the AMT? A.The individual alternative minimum tax (AMT) operates alongside the regular income tax. It requires many taxpayers to calculate their liability twice—once under the rules for the regular income tax and once under the AMT rules—and then pay the higher amount. Originally intended to prevent perceived abuses by a handful of the very rich, it now affects roughly 5 million filers. Briefing Book page Read more about What is the AMT?
How might we improve the AMT? Q.How might we improve the AMT? A.Congress could retarget the AMT to its original purpose or enact a major overhaul of the income tax system, eliminating the need for an alternative tax. Briefing Book page Read more about How might we improve the AMT?
