The Individual Amt: Problems and Potential Solutions

Tax Policy Center Discussion Paper No. 5

69 Pages Posted: 19 Sep 2002

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

Jeff Rohaly

Urban Institute

Benjamin H. Harris

Brookings Institution

Multiple version iconThere are 3 versions of this paper

Date Written: August 13, 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, tax complexity, equity, efficiency

JEL Classification: H2, H3

Suggested Citation

Burman, Leonard E. and Gale, William G. and Rohaly, Jeff and Harris, Benjamin H., The Individual Amt: Problems and Potential Solutions (August 13, 2002). Tax Policy Center Discussion Paper No. 5. Available at SSRN: https://ssrn.com/abstract=323840 or http://dx.doi.org/10.2139/ssrn.323840

Leonard E. Burman

Tax Policy Center ( email )

Urban Institute
2100 M Street NW
Washington, DC 20009
United States
2022615742 (Phone)

Maxwell School ( email )

400 Eggers Hall
Syracuse, NY 13244
United States
315-443-3114 (Phone)

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States
202-261-5248 (Phone)

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

Jeff Rohaly

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Benjamin H. Harris

Brookings Institution ( email )

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

Register to save articles to
your library

Register

Paper statistics

Downloads
136
Abstract Views
2,030
rank
190,995
PlumX Metrics