The Individual AMT: Problems and Potential Solutions

78 Pages Posted: 19 Jul 2014

See all articles by Leonard E. Burman

Leonard E. Burman

Tax Policy Center; Maxwell School; Urban Institute; Syracuse University - Center for Policy Research

William G. Gale

Brookings Institution

Jeffrey Rohaly

Urban Institute

Benjamin H. Harris

Brookings Institution

Multiple version iconThere are 3 versions of this paper

Date Written: September 2002

Abstract

Originally targeted at high-income households, the individual alternative minimum tax (AMT) is now on the verge of switching from a “class tax” to a “mass tax.” Under current law, the AMT will encroach dramatically on the middle-class over the next decade and will become the de facto tax system for upper-income households. These changes occur because of the non-indexation of the AMT for inflation and the tax cuts enacted in 2001. The trends are troubling because the AMT is notoriously complex, its effects on efficiency and equity are questionable, and its underlying purpose is controversial. This paper provides information on the AMT, its economic effects, and options for policy reform, and is intended to help inform the debate and the eventual reforms that will be required in the near future.

Keywords: alternative minimum tax

JEL Classification: H2

Suggested Citation

Burman, Leonard E. and Gale, William G. and Rohaly, Jeffrey and Harris, Benjamin H., The Individual AMT: Problems and Potential Solutions (September 2002). Available at SSRN: https://ssrn.com/abstract=2467621 or http://dx.doi.org/10.2139/ssrn.2467621

Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
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Maxwell School ( email )

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Urban Institute ( email )

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Syracuse University - Center for Policy Research ( email )

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William G. Gale (Contact Author)

Brookings Institution ( email )

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Jeffrey Rohaly

Urban Institute ( email )

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Washington, DC 20037
United States

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

Benjamin H. Harris

Brookings Institution ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

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