The AMT: What's Wrong and How to Fix it?

22 Pages Posted: 2 Feb 2011  

William G. Gale

Brookings Institution

Leonard E. Burman

Tax Policy Center; Maxwell School; National Bureau of Economic Research (NBER)

Greg Leiserson

Urban Institute

Jeffrey Rohaly

Urban Institute

Date Written: 2007

Abstract

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.

Keywords: AMT, alternative minimum tax, tax policy

JEL Classification: E62

Suggested Citation

Gale, William G. and Burman, Leonard E. and Leiserson, Greg and Rohaly, Jeffrey, The AMT: What's Wrong and How to Fix it? (2007). National Tax Journal, Vol. 60, No. 3, 2007. Available at SSRN: https://ssrn.com/abstract=1753192

William G. Gale (Contact Author)

Brookings Institution ( email )

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202-797-6148 (Phone)
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Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
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United States
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Maxwell School ( email )

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Syracuse, NY 13244
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National Bureau of Economic Research (NBER) ( email )

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Greg Leiserson

Urban Institute

2100 M Street, NW
Washington, DC 20037
United States

Jeffrey Rohaly

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

HOME PAGE: http://www.taxpolicycenter.org

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