The foregoing article begins with a critical examination of the AMT, its purpose, policy rationale, and the manner that it is calculated. Next, the article discusses the mushrooming number of individuals subject to the AMT, and the author posits that the AMT, in its current form, is neither achieving its intended purpose nor fulfilling its policy objective given the increasing number of unintended middle and upper middle class taxpayers subject to the tax. Next, the author critically examines the Bush tax cuts from 2001 to 2004, and concludes that the Bush tax cuts, and the fact that the AMT parameters are not indexed for inflation, are primarily responsible for the increasing number of middle and upper middle class taxpayers subject to the AMT.
Next, the article discusses and criticizes as inadequate band-aid fixes, current Congressional use of yearly AMT exemption amount increases to temporarily mitigate the increasing number of individuals subject to the AMT. Finally, the article proposes several permanent AMT solutions, which include exempting from the AMT altogether taxpayers with AGI of $250,000 or less. The article concludes that such exemption would not only align the AMT with its original purpose and policy objective, but would also restore confidence in our voluntary self-assessment system by permanently eliminating middle and upper middle class taxpayers from the burden and complexities of computing the AMT.
"The Individual Alternative Minimum Tax and the Intersection of the Bush Tax Cuts: A Proposal for Permanent Reform,"
Akron Tax Journal: Vol. 23
, Article 4.
Available at: https://ideaexchange.uakron.edu/akrontaxjournal/vol23/iss1/4