“Alternative minimum tax”的意思、由来-开放百科全书

The alternative minimum tax (AMT) is a supplemental income tax imposed by the United States federal government in addition to baseline income tax for certain individuals, corporations, estates, and trusts that have exemptions or special circumstances allowing for lower payments of standard income tax. AMT is imposed at a nearly flat rate on an adjusted amount of taxable income above a certain threshold (also known as exemption). This exemption is substantially higher than the exemption from regular income tax.

Regular taxable income is adjusted for certain items computed differently for AMT, such as depreciation and medical expenses. No deduction is allowed for state taxes or miscellaneous itemized deductions in computing AMT income. Taxpayers with incomes above the exemption whose regular Federal income tax is below the amount of AMT must pay the higher AMT amount.

A predecessor "minimum tax", enacted in 1969, imposed an additional tax on certain tax benefits for certain taxpayers. The present AMT was enacted in 1982 and limits tax benefits from a variety of deductions.

The AMT was originally designed to tax high-income taxpayers who used the regular tax system to pay little or no tax. Over the years, however, inflation has caused it to apply to middle-income taxpayers. Congress sporadically raises the AMT's income thresholds to give relief to these taxpayers. The American Taxpayer Relief Act of 2012 indexes these thresholds each year for inflation.^[1] Nevertheless, the number of taxpayers subject to it has increased from 200,000 in 1982 to 5.2 million in 2017.^[2]

The Tax Cuts and Jobs Act of 2017 raised personal AMT exemption levels and exemption phase-out levels, but eliminated several itemized deductions. The TCJA also indexed the AMT exemptions for inflation in years after 2018. The changes are projected to reduce the number of taxpayers affected by AMT in 2018 and beyond back to the 200,000 who were subject to AMT in 1982.^[3]

The TCJA was "scored" to ensure that its cost in lower government revenue was small enough to qualify under the Senate's reconciliation procedure. To improve the scoring, changes to the personal income tax, including to the AMT, expire at the end of 2025.

AMT basics

Each year, high-income taxpayers must calculate and then pay the greater of an alternative minimum tax (AMT) or regular tax.^[5] The basis for the tax is not taxable income but income subject to a different calculation. Taxes paid over the course of the tax year do not account for AMT; if the AMT is greater than regular tax, the taxpayer will owe additional tax.

The AMT taxes income above an "exemption" level at 26%, up to a second threshold; and thereafter at 28%. Moreover, above still higher thresholds, the exemption from AMT is lost (at a rate of $1 for each $4 of income above that threshold). At another threshold, the high (28%) tax rate begins to replace the low (26%) rate. (These "clawbacks" result in effective marginal tax rates of 32.5% and 35%.) Very high earners are taxed at 28% of their entire income (with no exemption).

A lower tax rate applies to long-term capital gains (and qualifying dividends).^[6]

In addition, corporations with average annual gross receipts of $7,500,000 or less for the prior three years are exempt from AMT, but only so long as they continue to meet this test.^[8] Further, a corporation is exempt from AMT during its first year as a corporation. Affiliated corporations are treated as if they were a single corporation for all three exemptions ($40,000, $7.5 million, and first year).^[9]

To the extent AMT exceeds regular Federal income tax, a future credit is provided which can offset future regular tax to the extent AMT does not apply in a future year. However, this credit is limited: see further details in the "AMT credit against regular tax" section.

Regular tax used as a basis for computing AMT is found on the following lines of tax return forms: individual [https://www.irs.gov/pub/irs-pdf/f1040.pdf Form 1040] Line 44, or corporate [https://www.irs.gov/pub/irs-pdf/f1120.pdf Form 1120] Schedule J line 2 less foreign tax credit.^[10]

Under the AMT, no deduction is allowed for personal exemptions (other than the AMT specific exemption, which is larger than the personal exemption except for high income taxpayers), nor is the standard deduction.^[11] State, local, and foreign taxes are not deductible. However, most other itemized deductions apply at least in part. Significant other adjustments to income and deductions apply.

Individuals must file IRS [https://www.irs.gov/pub/irs-pdf/f6251.pdf Form 6251] and corporations must file [https://www.irs.gov/pub/irs-pdf/f4626.pdf Form 4626] if they have any net AMT due. The form is also filed to claim the credit for prior year AMT.

Many AMT adjustments apply to businesses operated by individuals or corporations.^[13] The adjustments tend to have the effect of deferring certain deductions or recognizing income sooner. These adjustments include:

Certain other adjustments apply. Corporations are also subject to an adjustment (up or down) for adjusted current earnings.^[14] In addition, a partner or shareholder's share of AMT income and adjustments flow through to the partner or shareholder from the partnership^[15] or S corporation.^[16]

AMT is reduced by a foreign tax credit, limited based on AMT income rather than regular taxable income.^[17] Certain specified business tax credits are allowed.^[18]

History

A predecessor "minimum tax" was enacted by the Tax Reform Act of 1969^[19] and went into effect in 1970. Treasury Secretary Joseph Barr prompted the enactment action with an announcement that 155 high-income households had not paid a dime of federal income taxes.^[20] The households had taken advantage of so many tax benefits and deductions that they had reduced their tax liabilities to zero.^[21] Congress responded by creating an add-on tax on high-income households, equal to 10% of the sum of tax preferences in excess of $30,000 plus the taxpayer's regular tax liability.^[22]

The explanation of the 1969 Act prepared by Congress's Staff of the Joint Committee on Internal Revenue Taxation described the reason for the AMT as follows:

The AMT has undergone several changes since 1969. The most significant of those, according to the Joint Committee on Taxation, occurred under the Reagan era Tax Equity and Fiscal Responsibility Act of 1982.^[22] The law changed the AMT from an add-on tax to its current form: a parallel tax system. The current structure of the AMT reflects changes that were made by the 1982 law. However, participation and revenues from the AMT temporarily plummeted after the 1986 changes.^[24] Congress made other notable, but less significant, changes to the law in 1978, 1982, and 1986.^[25]

Further significant changes occurred as a result of the Omnibus Budget Reconciliation Acts of 1990 and 1993, which raised the AMT rate to 24% from the prior level of 21% and then to 26% and 28% for individual filers with incomes that exceeded $175,000.^[26] Now, some taxpayers who do not have very high incomes or participate in numerous special tax benefits and/or activities will pay the AMT.^[27]

"Patches" to tax rates and exemptions

For years since then, Congress had passed one-year "patches" aimed at minimizing the impact of the tax. While not automatically indexed for inflation until a change in the law in early 2013, the exemption had been increased by Congress many times. In addition, the tax rate was increased for individuals effective 1991 and 1993, and the tax was limited for capital gains and qualifying dividends in 2003.

For the 2007 tax year, the patch was passed on December 20, 2007, but only after the IRS had already designed its forms for 2007. The IRS had to reprogram its forms to accommodate the law change.^[28]

The tax rate for corporations has remained 20%, and the exemption amount has remained $40,000 since the 1986 changes.

The American Taxpayer Relief Act of 2012 set the 2012 exemption amounts to $78,750 for Married Filing Jointly and $50,600 for Single, and made future exemption amounts indexed for inflation.^[35]

AMT details

Alternative minimum tax (AMT)^[36] is imposed on an alternative, more comprehensive measure of income than regular federal income tax. Conceptually, it is imposed instead of, rather than in addition to, regular tax.

AMT is imposed if the tentative minimum tax exceeds the regular tax.^[37] Tentative minimum tax is the AMT rate of tax times alternative minimum taxable income (AMTI) less the AMT foreign tax credit. Regular tax is the regular income tax reduced only by the foreign and possessions tax credits.^[10] In any year in which regular tax exceeds tentative minimum tax, a credit (AMT Credit) is allowed against regular tax to the extent the taxpayer has paid AMT in any prior year. This credit may not reduce regular tax below the tentative minimum tax.

Alternative minimum taxable income is regular taxable income, plus or minus certain adjustments, plus tax preference items, less the allowable exemption (as phased out).

Taxpayers and rates

Individuals, C corporations, estates, and trusts are subject to AMT. Partnerships and S corporations are generally not subject to income or AMT taxes,^[38] but, instead, pass-through the income and items related to computing AMT to their partners and shareholders.^[39] Foreign persons are subject to AMT only on their income effectively connected with a U.S. trade or business.^[40]

The rate of AMT varies by type of taxpayer.^[41] Through 2012, individuals, estates, and trusts are subject to the same rate of tax on long-term capital gains for regular tax and AMT.

Exemptions

The deduction for personal exemptions is not allowed. Instead, all taxpayers are granted an exemption that is phased out at higher income levels.^[42] See above for amounts of this exemption and phase-out points. Due to the phase-out of exemptions, the actual marginal tax rate (1.25*26% = 32.5%) is higher for the income above the phase-out point. The married-filing-separately (MFS) phase-out does not stop when the exemption reaches zero, either in 2009 or 2010. This is because the MFS exemption is half of the joint exemption, but the phase-out is the full amount, so for MFS filers the phase-out amount can be up to twice the exemption amount, resulting in a 'negative exemption'.

For example, using 2009 figures, a filer with $358,800 of income not only gets zero exemption, but is also taxed on an additional $35,475 that was never actually earned (see "Line 29 — Alternative Minimum Taxable Income" in [https://www.irs.gov/pub/irs-prior/i6251--2009.pdf 2009 Instructions for Form 6251] or "Line 28 — Alternative Minimum Taxable Income" in [https://www.irs.gov/pub/irs-prior/i6251--2010.pdf 2010 Instructions for Form 6251]). This prevents a married couple with dissimilar incomes from benefiting by filing separate returns so that the lower earner gets the benefit of some exemption amount that would be phased out if they filed jointly. When filing separately, each spouse in effect not only has their own exemption phased out, but is also taxed on a second exemption too, on the presumption that the other spouse could be claiming that on their own separate MFS return.

Small corporations are exempt from AMT.^[8] A small corporation is one with average gross receipts for the prior three years of $7.5 million or less. Once a corporation ceases to be a small corporation for AMT, it is never again a small corporation. This limit is applied to all members of an affiliated group as if they were a single corporation.

Depreciation and other adjustments

All taxpayers claiming deductions for depreciation must adjust those deductions in computing AMT income to the amount of deduction allowed for AMT.^[43] For AMT purposes, depreciation is computed on most assets under the straight line method using the class life of the asset. When a taxpayer is required to recognize gain or loss on disposal of a depreciable asset (or pollution control facility), the gain or loss must be adjusted to reflect the AMT depreciation amount rather than regular depreciation amounts.^[44] This adjustment also applies to additional amounts deducted in the year of acquisition of the assets. For more details on these calculations, see MACRS.

In addition, corporate taxpayers may be required to make adjustments to depreciation deductions in computing the adjusted current earnings (ACE) adjustment.^[14] Such adjustments only apply to assets acquired before 1989.

Adjustments for individuals

Individuals are not allowed certain deductions in computing AMT that are allowed for regular tax.^[11] No deduction is allowed for personal exemptions or for the standard deduction. The phase-out of itemized deductions does not apply. No deduction is allowed for state, local, or foreign income or property taxes. A recovery of such taxes is excluded from AMTI. No deduction is allowed for most miscellaneous itemized deductions.

Medical expenses are deductible for AMT only to the extent they exceed 10% of adjusted gross income (this is not unique to AMT, it applies to regular income tax as well).^[49]

Interest expense deductions for individuals may be adjusted.^[50] Generally, interest paid on debt used to acquire, construct, or improve the individual's principal or second residence is unaffected. This includes interest resulting from refinancing such debt. In addition, investment interest expense is deductible for AMT only to the extent of adjusted net investment income. Other non-business interest is generally not deductible for AMT.

An adjustment is also made for qualified incentive stock options and stock received under employee stock purchase plans.^[51] In both cases, the employee must recognize income for AMT purposes on the bargain or compensation element, the employer is granted a deduction for this, and the employee has basis in the shares received.

Adjusted current earnings for corporations

Corporations are required to make an adjustment based on adjusted current earnings (ACE).^[14] The adjustment increases or decreases AMTI for 75% of the difference between ACE and AMTI. ACE is AMTI further adjusted for certain items. These include further depreciation adjustments for most assets, adjustments to more closely reflect earnings and profits, cost rather than percentage depletion, LIFO, charitable contributions and certain other items.

Losses

The deduction for net operating losses is adjusted to be based on losses for AMTI.^[53]

Farm losses are limited for AMT purposes. Passive activity losses are recomputed for AMT purposes based on income and deductions as recomputed for AMT. Certain adjustments apply with respect to farm and passive activity loss rules for insolvent taxpayers.^[54]

Tax preferences

All taxpayers must add back tax preference deductions in computing AMTI.^[55] Tax preferences include the following amounts of deduction:

Taxpayers may elect an optional 10-year write-off of certain tax preference items in lieu of the preference add-back.

Note that in prior years there were certain other tax preference items relating to provisions now repealed.

Credits

Credits are allowed against AMT for foreign taxes^[56] and certain specified business credits.^[57]

The AMT foreign tax credit limitation is redetermined based on AMTI rather than regular taxable income. Thus, all adjustments and tax preference items above must be applied in computing the AMT foreign tax credit limitation.

AMT credit against regular tax

After a taxpayer has paid AMT, a credit is allowed against regular tax in future years for the amount of AMT.^[58] The credit for individuals is generally limited to the amount of AMT generated by deferral items (e.g. exercise of incentive stock options), as opposed to exclusion items (e.g. state and local taxes).^[59] This credit is limited so that regular tax is not reduced below AMT for the year. Taxpayers may use a simplified method under which the AMT foreign tax credit limit is computed proportionately to the regular tax foreign tax credit limit. IRS Form 8801 is used to claim this credit.

Stock options

The alternative minimum tax may apply to individuals exercising stock options. Under AMT rules, for incentive stock options at the time of exercise, the "bargain element" or "spread price" (the difference between the strike price and fair market value) is treated as an AMT adjustment, and therefore needs to be added to the AMT calculation even though no ordinary income tax is due at the time of exercise. In contrast, under the regular tax rules capital gains taxes are not paid until the actual shares of stock are sold. For example, if someone exercised a 10,000 share Nortel stock option at $7 when the stock price was at $87, the bargain element was $80 per share or $800,000. Without selling the stock, the stock price dropped to $7. Although the real gain is $0, the $800,000 bargain element still becomes an AMT adjustment, and the taxpayer owes around $200,000 in AMT.

The AMT was designed to prevent people from using loopholes in the tax law to avoid tax. However, the inclusion of unrealized gain on incentive stock options imposes difficulties for people who cannot come up with cash to pay tax on gains that they have not realized yet. As a result, Congress has taken action to modify the AMT regarding incentive stock options. In 2000 and 2001, people exercised incentive stock options and held onto the shares, hoping to pay long-term capital gains taxes instead of short-term capital gains taxes.^[60] Many of these people were forced to pay the AMT on this income, and by the end of the year, the stock was no longer worth the amount of alternative minimum tax owed, forcing some individuals into bankruptcy. In the Nortel example given above, the individual would receive a credit for the AMT paid when the individual did eventually sell the Nortel shares. However, given the way AMT carryover amounts are recalculated each year, the eventual credit received is in many cases less than originally paid.

Stock options in non-public companies

In the Nortel example above, the taxpayer could have avoided problems by selling sufficient stock to cover the AMT liability immediately upon exercising the stock options. However, AMT also applies to stock options in pre-IPO or privately held companies: in such cases the IRS calculates the "fair market value" of the stock on the basis of information supplied by the company, and therefore may treat the stock as having significant value even though the employee may be unable to sell it (either because there is no market, or because of legal restrictions such as lock-up periods). In such a case, it may be effectively impossible for the employee to exercise the option unless he or she has enough cash with which to pay the AMT.

Growth of the AMT

Although the AMT was originally enacted to target 155 high-income households, it now affects millions of families each year. The number of households that pay the tax has increased significantly in the last decade: In 1997, for example, 605,000 taxpayers paid the AMT;^[61] by 2008, the number of affected taxpayers jumped to 3.9 million, or about 4% of individual taxpayers.^[62] A total of 27% of households that paid the AMT in 2008 had adjusted gross income of $200,000 or less.^[63]

The primary reason for AMT growth is the fact that the AMT exemption, unlike regular income tax items, was not indexed to inflation before 2013. This means that income thresholds did not keep pace with the cost of living.^[64] As a result, the tax has affected an increasing number of households each year, as workers' incomes adjusted to inflation and surpassed AMT eligibility levels. While not indexed for inflation, Congress often passed short-term increases in exemption amounts. The Tax Policy Center (a research group) estimated that if the AMT had been indexed to inflation in 1985, and if the Bush tax cuts had not gone into effect, only 300,000 taxpayers—instead of their projected 27 million—would be subject to the tax in 2010.^[65] President Barack Obama included indexing the AMT to inflation in his FY2011 budget proposal, which did not pass. AMT raised $26 billion of $1,031 billion total individual income tax in 2008.^[62]

Another important reason for the recent expansion of the AMT is the effect of the 2001–2006 Bush tax cuts.^[64] The tax cuts decreased marginal tax rates for all income tax brackets without making corresponding changes to AMT rates. The lower tax liabilities triggered AMT eligibility for many households. Economists often refer to this as the "take-back effect" of the Bush tax cuts.^[61]

As the AMT has expanded, the inequalities created by the structure of the tax have become more apparent. Taxpayers are not allowed to deduct state and local taxes in calculating their AMT liability; as a result, taxpayers who live in states with high income tax rates are up to 7 times more likely to pay the AMT than those who live in states with lower income tax rates.^[66] Similarly, taxpayers are not allowed to deduct personal exemptions in calculating their AMT liability; as a result, taxpayers with large families—and specifically families with 3 or more children—are more likely to pay the AMT than smaller families.^[67]

Opinions about AMT

The AMT rate has not been changed at the same times as regular income tax rates. The tax cut passed in 2001 lowered regular tax rates, but did not lower AMT rates. As a result, certain people are affected by the AMT who were not the intended targets of the laws. People with large deductions, particularly those resident in states or cities with high income tax rates, or those with nonqualifying mortgage interest deductions, are most affected. The AMT also has the potential to tax families with large numbers of dependents (usually children), although in recent years, Congress has acted to keep deductions for dependents, especially children, from triggering the AMT.

Because the AMT was not indexed to inflation until 2013, and because of recent tax cuts,^[21]^[68] an increasing number of middle-income taxpayers have been finding themselves subject to this tax. The lack of indexing produces bracket creep. The recent tax cuts in the regular tax have the effect of causing many taxpayers to pay some AMT, reducing or eliminating the benefit from the reduction in regular rates. (In all such cases, however, the overall tax payable will not increase.)^[69]

In 2006, the IRS's National Taxpayer Advocate's report highlighted the AMT as the single most serious problem with the tax code. The Advocate noted that the AMT punishes taxpayers for having children or living in a high-tax state and that the complexity of the AMT leads to most taxpayers who owe AMT not realizing it until preparing their returns or being notified by the IRS.^[70] A brief issued by the Congressional Budget Office (CBO) (No. 4, April 15, 2004), concludes:

However, CBO's rules^[72] state that it must use current law in its analysis, and at the time the above text was written, the AMT threshold was set to expire in 2006 and be reset to far lower values.^[73]

Critics of the AMT argue that various features are flaws, though others defend some of these features:

A further shift, involving many definitional changes and extensive reorganization, occurred with the Tax Reform Act of 1986.

A further criticism is that the AMT does not even affect its intended target. Congress introduced the AMT after it was discovered that 21 millionaires did not pay any US income tax in 1969 as a result of various deductions taken on their income tax return. Since the marginal rate of persons with one million dollars of income is 39.6% and the AMT uses a 26% or 28% rate on all income, it is unlikely that millionaires would get tripped by the AMT as their effective tax rates are already higher. Those that do pay by the AMT are typically people making approximately $200k–$500k.^[78]

Determining whether one is subject to the AMT can be difficult. According to the IRS's taxpayer advocate, determining whether someone owes the AMT can require reading 9 pages of instructions, and completing a 16-line worksheet and a 55-line form.^[79]

Complexity

The AMT is a tax of roughly 28% on adjusted gross income over $186,300^[80] plus 26% of amounts less than $186,300 minus an exemption depending on filing status after adding back in most deductions. However, taxpayers must also perform all of the paperwork for a regular tax return and then all of the paperwork for Form 6251. Furthermore, affected taxpayers may have to calculate AMT versions of all carryforwards since the AMT carryforwards may be different than regular tax carryforwards. Once a taxpayer qualifies for AMT, he or she may have to calculate AMT versions of carryforward losses and AMT carryforward credits until they are used up in future years. The definitions of taxable income, deductible expenses, and exemptions differ on Form 6251 from those on Form 1040.

The complexity of the AMT paired with the history of last minute annual patches adjusting the law create tax liability uncertainty for taxpayers. For the last ten years, Congress has passed one-year patches to mitigate negative effects, but they are typically passed close to the end of the year. This makes it difficult for taxpayers to determine their tax liability ahead of time. In addition, because the AMT was not indexed for inflation until 2013, the cost of annual patches rises every year.^[81]

Taxpayer incomes

The AMT's former lack of indexation was widely conceded across the political spectrum as a flaw. In 2005, the Urban-Brookings Tax Policy Center and the US Treasury Department estimated that around 15% of households with incomes between $75,000 and $100,000 must pay the AMT, up from only 2–3% in 2000, with the percentage increasing at high incomes. That percentage was set to increase quickly over the coming years if no changes had been made, most notably indexing for inflation. Currently, households with incomes below $75,000 are subject to the AMT only very rarely (and thus most tax advisors do not recommend computing AMT for such households). That was set to change in only a few years, however, if the AMT had remained unindexed.^[82]

The median household income in the United States was $44,389 in 2005, and households making over $75,000 per year made up the top quartile of household incomes. Because those are the households generally required to compute the AMT (though only a fraction currently have to pay), some argue that the AMT still hits only the wealthy or the upper middle class. However, some counties, such as Fairfax County, Virginia ($102,460),^[83] and some cities, such as San Jose, California ($76,354),^[84] have local median incomes that are considerably higher than the national median, and approach or exceed the typical AMT threshold.

The cost-of-living index is generally higher in such areas, which leads to families who are "middle class" in that area having to pay the AMT, while in poorer locales with lower costs of living, only the "locally wealthy" pay the AMT. In other words, many who pay the AMT have incomes that would place them among the wealthy when considering the United States as a whole, but who think of themselves as "middle class" because of the cost of living in their locale.

As early as the first Tax Reform study in 1984, arguments were made for eliminating the deduction for state and local taxes:

Proponents of eliminating the state and local tax deduction lost out in the 1986 Tax Reform, but they won a concession by eliminating these deductions in the AMT computation. That, coupled with the non-indexation of the AMT, created a slow-motion repeal of the deduction for state and local income taxes.

The AMT's partial disallowance of the foreign tax credit disadvantages even low-paid American citizens and green card holders who work abroad or who are otherwise paid in foreign currency. Particularly as the dollar falls around the world, those working abroad see their incomes (when reported to the IRS in terms of US dollars) skyrocket, even if their actual incomes fall from year to year, and even if their foreign tax liabilities increase. They are in effect being taxed solely on changes in exchange rates, from which they do not benefit because their household expenses are all in foreign currency.

Avoiding AMT

AMT may be avoided by staying out of the $150,000 to $415,000 income range.^[86]

For example, a taxpayer might be better off realizing a $1 million capital gain all in one year rather than dividing it into two or three years.

For taxpayers who owe AMT, IRA (Individual Retirement Account)/Qualified plan contributions, charitable deductions and home mortgage interest (but not "hard money" refinancing interest) are especially valuable. They reduce tax liability by the full tentative minimum tax effective marginal rate of 32.5% or 35% (for those in the AMT exemption phase-out range)^[87] plus the full state income tax marginal rate.^[88] This may be quite a bit better than under the regular tax.^[89]

Arguments against repealing the AMT

While many parties agree that the AMT needs to be changed, some argue against its outright repeal.

AMT reform

Policy analysts are divided over the best way to address the criticisms of the AMT. Len Burman and Greg Leiserson of The Tax Policy Center, a joint program of the Urban Institute and Brookings Institution, have proposed a revenue-neutral, highly progressive replacement for the AMT. They suggest an "option [that] would repeal the AMT and replace it with an add-on tax of four percent of adjusted gross income above $100,000 for singles and $200,000 for couples. The thresholds would be indexed for inflation after 2007." This plan, the authors contend, would share the original goal of the AMT—that is, to ensure a certain level of taxation for high earners.^[92]

Other groups advocate repealing the AMT rather than attempting to reform it. One such group, the Cato Institute, notes that:

The right-leaning National Taxpayers Union also supports repeal. "It is wholly unfair for policymakers to promote certain social and fiscal ideas through exemptions, credits, and deductions, only to take these incentives away when a taxpayer takes advantage of them too well."^[94]

The conservative-leaning Tax Foundation says that the AMT could be effectively repealed simply by correcting the deficiencies in the regular tax code. Economist Patrick Fleenor argues that

Some have proposed abolishing the regular tax and modifying and indexing the AMT. A proposal to the 2005 President's Advisory Panel on Federal Tax Reform advocated increasing the AMT exemption to $100,000 ($50,000 for singles) and indexing it thereafter, applying a flat 25% rate, and allowing appropriate exemptions for income-producing activities, in addition to repeal of the regular tax.^[96]

References

1. ^{{cite news|title=At Long Last, a Permanent Patch for a Dreaded Tax|url=http://business.time.com/2013/01/03/at-long-last-a-permanent-patch-for-a-dreaded-tax/ | work=Time | date=January 3, 2013}}
2. ^[https://www.taxpolicycenter.org/model-estimates/baseline-alternative-minimum-tax-amt-tables-april-2017/t17-0146-aggregate-amt] Note that projections for 2018 and beyond were made before the Tax Cut and Jobs Act was passed in December 2017.
3. ^[https://www.taxpolicycenter.org/model-estimates/baseline-alternative-minimum-tax-amt-tables-oct-2018/t18-0145-aggregate-amt.] The IRS projects that AMT filings will also shrink 90%, from 10 million in 2017 to 1 million or fewer in 2018. [https://www.federalregister.gov/documents/2018/07/20/2018-15627/proposed-collection-comment-request-for-regulation-project].
4. ^
5. ^Calculating the Alternative Minimum Tax Congressional Budget Office Economics and Budget Issue Brief, 2010, page 2. See Willis & Hoffman (2009) page __, and Pratt & Kulsrud (2010) Chapter 13, both cited in “Further reading” section.
6. ^[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55]. Also see IRS [https://www.irs.gov/pub/irs-pdf/f6251.pdf Form 6251] (individuals) and [https://www.irs.gov/pub/irs-pdf/f4626.pdf Form 4626] (corporations).
7. ^ , AMT capital gains rate is 15%, but due to the inclusion of capital gains in AMT income, capital gains may reduce the AMT exemption, which can result in the effective capital gains rate rising as high as 22% depending on income
8. ^¹[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55(e)].
9. ^[https://www.law.cornell.edu/uscode/text/26/1561- 26 USC 1561(a)(3)].
10. ^¹[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55(c)].
11. ^¹[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)].
12. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)]. For a table of AMT Adjustments, see, e.g., Pratt & Kulsrud (2006) page 13-9.
13. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56] and [https://www.law.cornell.edu/uscode/text/26/57- 26 USC 57].
14. ^¹²[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(g)].
15. ^[https://www.law.cornell.edu/uscode/text/26/702- 26 USC 702(a)(7)] providing for 26 CFR 1.58-2(b).
16. ^[https://www.law.cornell.edu/uscode/text/26/1366- 26 USC 1366] and for 26 CFR 1.58-4.
17. ^[https://www.law.cornell.edu/uscode/text/26/59- 26 USC 59(a)].
18. ^[https://www.law.cornell.edu/uscode/text/26/38- 26 USC 38(c)]. These credits include the credits for alcohol used as fuel, low income housing, work opportunity, empowerment zone, renewable electricity, FICA tip, rehabilitation, and energy.
19. ^Pub. L. No. 91-172, 83 Stat. 487 (December 30, 1969).
20. ^http://www.taxfoundation.org/news/show/22400.html
21. ^¹²{{cite news| url=https://www.washingtonpost.com/wp-dyn/articles/A36988-2004Mar6.html | work=The Washington Post | title=Falling Into Alternative Minimum Trouble | first=Jonathan | last=Weisman | date=March 7, 2004 | accessdate=April 23, 2010}}
22. ^¹{{cite web|url=http://www.jct.gov/publications.html?func=select&id=19|title=JCT Publications 2007|publisher=}}
23. ^{{cite book |title=General explanation of the Tax reform act of 1969, H.R. 13270, 91st Congress, Public Law 91-172 |url=http://openlibrary.org/books/OL5739112M/General_explanation_of_the_Tax_reform_act_of_1969_H.R._13270 |date=December 3, 1970 |publisher=U.S. Government Printing Office |location=Washington |page=105 |accessdate=January 31, 2011 }}
24. ^L. E. Burman, W. G. Gale, J. Rohaly, and B. H. Harris, "The Individual AMT: Problems and Potential Solutions". Tax Policy Center: Urban Institute and Brookings Institution, September 2002.
25. ^{{cite web|url=http://www.jct.gov/x-37-05.pdf|title=Present Law and Background Relating to the Individual Alternative Minimum Tax|date=May 20, 2005| page=8| accessdate=September 4, 2009 | archiveurl= https://web.archive.org/web/20090906015331/http://www.jct.gov/x-37-05.pdf| archivedate= September 6, 2009 | deadurl= no}}
26. ^Pub. L No.103-66 Sec. 13203 (January 5, 1993).
27. ^{{cite web|url=http://www.fairmark.com/amt/amt101.htm|title=Alternative Minimum Tax 101|author=Kaye A. Thomas|accessdate=January 15, 2009| archiveurl= https://web.archive.org/web/20090121005420/http://fairmark.com/amt/amt101.htm| archivedate= January 21, 2009 | deadurl= no}}
28. ^{{cite news| url=https://www.nytimes.com/2007/12/20/washington/20cong.html | work=The New York Times | title=Congress Averts Higher Tax Bill for Middle Class | first=David M. | last=Herszenhorn | date=December 20, 2007 | accessdate=April 23, 2010}}
29. ^https://www.irs.gov/pub/irs-drop/rp-13-15.pdf
30. ^https://www.irs.gov/pub/irs-drop/rp-13-35.pdf
31. ^https://www.irs.gov/pub/irs-drop/rp-14-61.pdf
32. ^https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
33. ^https://www.irs.gov/pub/irs-drop/rp-16-55.pdf
34. ^https://www.irs.gov/pub/irs-drop/rp-17-58.pdf
35. ^See Internal Revenue Code section 55(d), as amended by section 104(b)(1) of the American Taxpayer Relief Act of 2012 (January 2, 2013).
36. ^The AMT is prescribed in [https://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_A_40_VI.html 26 USC 55 through 59] and 26 CFR 1.55-1 through 1.59-1. The IRS has not issued a publication on alternative minimum tax, but provides details in instructions to individual [https://www.irs.gov/app/picklist/list/formsInstructions.html?value=6251&criteria=formNumber&submitSearch=Find Form 6251] and corporate [https://www.irs.gov/app/picklist/list/formsInstructions.html?value=4626&criteria=formNumber&submitSearch=Find Form 4626]. The IRS also has a web-based calculator, [https://www.irs.gov/businesses/small/article/0,,id=150703,00.html Alternative Minimum Tax (AMT) Assistant for Individuals], available for recent tax years.
37. ^[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55(a)].
38. ^[https://www.law.cornell.edu/uscode/text/26/701- 26 USC 701], [https://www.law.cornell.edu/uscode/text/26/1363- 26 USC 1363(a)]. Note: An S corporation may be subject to tax on "built-in gains" if it was converted from a C corporation.
39. ^[https://www.law.cornell.edu/uscode/text/26/702- 26 USC 702], [https://www.law.cornell.edu/uscode/text/26/1366- 26 USC 1366].
40. ^Under [https://www.law.cornell.edu/uscode/text/26/871- 26 USC 871] and [https://www.law.cornell.edu/uscode/text/26/881- 26 USC 881], foreign persons are subject to a flat rate of tax of 30% of gross income, without allowance of any deductions, subject to reduction under tax treaties. Income taxed under these sections is excluded from the normal definition of gross income, and thus from AMT. See [https://www.law.cornell.edu/uscode/text/26/872- 26 USC 872] and [https://www.law.cornell.edu/uscode/text/26/882- 26 USC 882]. 26 USC 882 explicitly makes reference to 26 USC 55.
41. ^[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55(b)].
42. ^[https://www.law.cornell.edu/uscode/text/26/55- 26 USC 55(d)].
43. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(1)].
44. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(6)].
45. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(3)].
46. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(2)].
47. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(5)].
48. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(7)].
49. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)(1)(B)].
50. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)(1)(C)] and 26 USC 56(e).
51. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)(3)].
52. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(b)(2)].
53. ^[https://www.law.cornell.edu/uscode/text/26/56- 26 USC 56(a)(4)].
54. ^[https://www.law.cornell.edu/uscode/text/26/58- 26 USC 58].
55. ^[https://www.law.cornell.edu/uscode/text/26/57- 26 USC 57].
56. ^[https://www.law.cornell.edu/uscode/text/26/59- 26 USC 59].
57. ^[https://www.law.cornell.edu/uscode/text/26/38- 26 USC 38(c)(4)].
58. ^[https://www.law.cornell.edu/uscode/text/26/53- 26 USC 53].
59. ^{{cite web|url=http://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Return/Alternative-Minimum-Tax--Common-Questions/INF12072.html|title=Alternative Minimum Tax: Common Questions|first=TurboTax – Taxes, Income|last=Tax|publisher=}}
60. ^Stock Options, CNN Money
61. ^¹[Congressional Research Service, The Individual Alternative Minimum Tax, March 24, 2010]
62. ^¹[https://www.irs.gov/pub/irs-soi/10fallbul.pdf IRS 2010 Fall Statistics on Income Bulletin, page 49. Also see page 53 for certain totals.]
63. ^See IRS Statistics, above, page 49. Note that many tax preferences reduce adjusted gross income and increase AMT.
64. ^¹{{cite web|url=http://www.taxpolicycenter.org/publications/url.cfm?ID=411408|title=Options to Fix the AMT|date=January 19, 2007|publisher=}}
65. ^http://www.taxpolicycenter.org/publications/url.cfm?ID=1000505
66. ^http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=560
67. ^Congressional Budget Office report.
68. ^TPC Tax Topics Archive: The Individual Alternative Minimum Tax (AMT): 11 Key Facts and Projections {{webarchive |url=https://web.archive.org/web/20070502050655/http://www.taxpolicycenter.org/newsevents/events_amt_facts.cfm |date=May 2, 2007 }}
69. ^Statement of Alan Viard, American Enterprise Institute. Testimony Before the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means, March 07, 2007.
70. ^{{cite web|url=https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf|title=National Taxpayer Advocate 2006 Annual Report to Congress-Executive Summary|publisher=Internal Revenue Service |accessdate=July 22, 2008| archiveurl= https://web.archive.org/web/20080625032949/https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf| archivedate= June 25, 2008 | deadurl= no}}
71. ^{{cite web|url=http://www.cbo.gov/publication/15573|title=The Alternative Minimum Tax|date=April 15, 2004|work=cbo.gov}}
72. ^{{cite web|url=http://www.cbo.gov/publication/16558|title=What Is a Current-Law Economic Baseline?|date=June 2, 2005|work=cbo.gov}}
73. ^{{cite web|url=https://www.irs.gov/pub/irs-utl/2006_arc_vol_1_cover__section_1.pdf|title=IRS.gov 404 Error Page|publisher=}}
74. ^{{cite web|url=http://www.taxpolicycenter.org/UploadedPDF/1000818_Tax_Analysts_081505.pdf|title=The impact of repealing state and local tax deductibility|author=Kim Reuben|publisher=Tax Analysts / Tax Policy Center|date=May 15, 2008|accessdate=September 6, 2009| archiveurl= https://web.archive.org/web/20091010102446/http://www.taxpolicycenter.org/UploadedPDF/1000818_Tax_Analysts_081505.pdf| archivedate= October 10, 2009 | deadurl= no}}
75. ^{{cite web|url=http://www.mainstreet.com/article/moneyinvesting/taxes/daily-deduction-explaining-amt|title=Daily Deduction: Unraveling the Alternative Minimum Tax}}
76. ^{{cite web|url=http://archive.salon.com/tech/feature/2001/04/18/amt/print.html|title=Death to the AMT!}}
77. ^¹{{cite news | last=Johnston | first= David Cay | url=https://www.nytimes.com/2007/03/04/weekinreview/04johnston.html?_r=1 | title=The Untaxed Rich, Found and Then Lost | work= The New York Times | date=March 4, 2007 | accessdate=September 21, 2009}}
78. ^{{cite news |url=https://www.forbes.com/sites/anthonynitti/2013/03/12/tax-aspects-of-paul-ryans-fy-2014-republican-budget-proposal/|title=Tax Aspects Of Paul Ryan's FY 2014 Republican Budget Proposal | date=March 12, 2013 |work=Forbes |first=Tony |last=Nitti |accessdate=November 17, 2013}}
79. ^{{cite web|url=https://www.irs.gov/pub/irs-utl/2006_arc_vol_1_cover__section_1.pdf|title=National Taxpayer Advocate 2006 Report to Congress|accessdate=May 30, 2007| archiveurl= https://web.archive.org/web/20070614192419/https://www.irs.gov/pub/irs-utl/2006_arc_vol_1_cover__section_1.pdf| archivedate= June 14, 2007 | deadurl= no}}
80. ^https://www.irs.gov/pub/irs-pdf/i6251.pdf
81. ^{{cite web|url=http://www.taxpolicycenter.org/taxtopics/AMT.cfm|title=Alternative minimum tax (AMT)|work=taxpolicycenter.org}}
82. ^{{cite web | last=Leiserson | first=Greg | url=http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf| title=The Individual Alternative Minimum Tax: Historical Data and Projections | year=2008 | publisher= Brookings Institution & Urban Institute | accessdate=July 29, 2008| archiveurl= https://web.archive.org/web/20080910034202/http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf| archivedate= September 10, 2008 | deadurl= no}}
83. ^{{cite web | last= | first= | url=http://factfinder.census.gov/servlet/ACSSAFFFacts?_event=ChangeGeoContext&geo_id=05000US51059&_geoContext=01000US%7C04000US36%7C05000US36119&_street=&_county=fairfax&_cityTown=fairfax&_state=04000US51&_zip=&_lang=en&_sse=on&ActiveGeoDiv=geoSelect&_useEV=&pctxt=fph&pgsl=010&_submenuId=factsheet_1&ds_name=ACS_2007_3YR_SAFF&_ci_nbr=null&qr_name=null®=null%3Anull&_keyword=&_industry=| title=2005–2007 American Community Survey 3-Year Estimate – Fairfax County, Virginia | year=2008 | publisher= US Census Bureau | accessdate=September 24, 2008}}
84. ^{{cite web | last= | first= | url=http://factfinder.census.gov/servlet/ACSSAFFFacts?_event=Search&geo_id=16000US0667000&_geoContext=01000US%7C04000US06%7C16000US0667000&_street=&_county=san+jose&_cityTown=san+jose&_state=04000US06&_zip=&_lang=en&_sse=on&ActiveGeoDiv=geoSelect&_useEV=&pctxt=fph&pgsl=160&_submenuId=factsheet_1&ds_name=ACS_2006_SAFF&_ci_nbr=null&qr_name=null®=null%3Anull&_keyword=&_industry=| title=2005–2007 American Community Survey 3-Year Estimate – San Jose, CA | year=2008 | publisher= US Census Bureau | accessdate=September 24, 2008}}
85. ^{{cite book |title=Tax Reform for Fairness, Simplicity, and Economic Growth: The Treasury Department Report to the President. Volume 2: General Explanation of the Treasury Department Proposals |url=http://www.treasury.gov/resource-center/tax-policy/Pages/tax-reform-index.aspx |date=November 1984 |publisher=Office of the Secretary, Department of the Treasury |page=62 |accessdate=January 31, 2011}}
86. ^{{cite web|url=http://www.allbusiness.com/personal-finance/individual-taxes/172842-1.html |title=The alternative minimum tax and effective marginal tax rates |accessdate=April 11, 2016 |dead-url=yes |archiveurl=https://web.archive.org/web/20090617074207/http://www.allbusiness.com/personal-finance/individual-taxes/172842-1.html |archivedate=June 17, 2009 }}
87. ^The Individual Alternative Minimum Tax, Congressional Budget Office, Economic and Budget Issue Brief, 2010, page 6. Retrieved December 12, 2010.
88. ^{{cite web|url=http://taxpolicycenter.org/UploadedPDF/411194_expanding_reach_AMT.pdf|title=The Expanding Reach of the Individual Alternative Minimum Tax|accessdate=February 27, 2009| archiveurl= https://web.archive.org/web/20090226150343/http://www.taxpolicycenter.org/UploadedPDF/411194_expanding_reach_AMT.pdf| archivedate= February 26, 2009 | deadurl= no}}
89. ^{{cite web|url=https://www.irs.gov/pub/irs-pdf/i1040tt.pdf|title=Federal Income Tax Table (with Rate Schedule on last page)|accessdate=February 27, 2009| archiveurl= https://web.archive.org/web/20090224123930/https://www.irs.gov/pub/irs-pdf/i1040tt.pdf| archivedate= February 24, 2009 | deadurl= no}}
90. ^{{cite web|url=http://www.cbpp.org/2-14-07tax.htm|title=Myths and Realities about the Alternative Minimum Tax|author=Aviva Aron-Dine|date=February 14, 2007|publisher=Center on Budgetary and Policy Priorities|accessdate=May 30, 2007| archiveurl= https://web.archive.org/web/20070627105001/http://www.cbpp.org/2-14-07tax.htm| archivedate= June 27, 2007 | deadurl= no}} (see myth 1)
91. ^{{cite web|url=http://www.cbpp.org/2-14-07tax.htm|title=Myths and Realities about the Alternative Minimum Tax|author=Aviva Aron-Dine|date=February 14, 2007|publisher=Center on Budgetary and Policy Priorities|accessdate=May 30, 2007| archiveurl= https://web.archive.org/web/20070627105001/http://www.cbpp.org/2-14-07tax.htm| archivedate= June 27, 2007 | deadurl= no}} (see myth 3)
92. ^{{cite web|url=http://www.taxpolicycenter.org/newsevents/simpletax.cfm|title=A Simple, Progressive Replacement for the AMT|accessdate=June 27, 2007| archiveurl= https://web.archive.org/web/20070603180507/http://www.taxpolicycenter.org/newsevents/simpletax.cfm| archivedate= June 3, 2007 | deadurl= no}}
93. ^{{cite web|url=http://www.cato.org/pubs/tbb/tbb_0507_45.pdf|title=The Alternative Minimum Tax: Repeal, Not Reform|accessdate=June 27, 2007| archiveurl= https://web.archive.org/web/20070612194512/http://www.cato.org/pubs/tbb/tbb_0507_45.pdf| archivedate= June 12, 2007 | deadurl= no}}
94. ^{{cite web |url=http://www.ntu.org/main/press_papers.php?PressID=577&org_name=NTU |title=The Individual Alternative Minimum Tax: No Alternative But Repeal |accessdate=June 27, 2007 |archiveurl=https://web.archive.org/web/20070523204039/http://www.ntu.org/main/press_papers.php?PressID=577&org_name=NTU |archivedate=May 23, 2007 |deadurl=no |df=mdy}}
95. ^{{cite web|url=http://taxfoundation.org/article/fixing-alternative-minimum-tax|title=Fixing the Alternative Minimum Tax|accessdate=June 27, 2007| archiveurl= https://web.archive.org/web/20070810093212/http://www.taxfoundation.org/files/sr155.pdf| archivedate= August 10, 2007 | deadurl= no}}
96. ^{{cite web|url=http://www.taxreformpanel.gov/meetings/docs/graetz_052005.ppt|title=A Fair and Balanced Tax System for the 21st Century|accessdate=January 10, 2009| archiveurl= https://web.archive.org/web/20090109015426/http://taxreformpanel.gov/meetings/docs/graetz_052005.ppt| archivedate= January 9, 2009 | deadurl= no}}