What is the AMT? Q.What is the AMT? A.The individual alternative minimum tax (AMT) operates alongside the regular income tax. It requires some 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, the AMT affected roughly 5.1 million filers in 2017. The Tax Cuts and Jobs Act dramatically reduced the reach of the AMT, albeit temporarily, so that the tax will hit only 200,000 filers in 2019. Read more about What is the AMT?
How much revenue does the AMT raise? Q.How much revenue does the AMT raise? A.About $4.7 billion in 2019, or 0.3 percent of all individual income tax revenue. That is down significantly from $37.7 billion—2.6 percent of income tax revenue—in 2017, primarily because of the 2017 Tax Cuts and Jobs Act (TCJA). Since most the TCJA individual income tax provisions expire at the end of 2025, AMT revenue will soar to $75.1 billion by 2030, or 2.6 percent of all individual income tax revenue. Read more about How much revenue does the AMT raise?
Why are taxes so complicated? Q.Why are taxes so complicated? A.Our tax system could be simple if its only purpose were to raise revenue. But it has other goals, including fairness, efficiency, and enforceability. And Congress has used the tax system to influence social policy as well as to deliver benefits for specific groups and industries. Read more about Why are taxes so complicated?
