National Tax Journal · 1997 · 14 citations · 0 references
Optimal TaxationFiscal IssueCorporate TaxIndividual DifferencesLawIndividual AmtTaxation Of ExemptsTax IncidenceComplicated TaxTax IncentiveCorporate TaxationRegular Income TaxFederal Tax PracticeRandomized Controlled TrialEstate TaxAssessmentTax PolicyTax LawFiscal PolicyEconomicsPublic PolicyMinimum TaxationTax AvoidanceFinancePublic FinanceFederal TaxFederal Income TaxMacroeconomicsEconomic PolicyBusinessEconometricsTaxation
The individual alternative minimum tax (AMT) is a complicated tax that currently affects relatively few taxpayers (700,000 in 1997) and raises relatively little revenue ($4.5 billion in 1997). By 2007, however, the number of AMT taxpayers will reach 9 million and their AMT liability will reach $21 billion. The reason for these very sharp increases is that the main parameters (e.g., personal exemption and rate bracket widths) of the regular income tax are indexed for inflation, whereas the main parameters (e.g., AMT exemption) of the AMT are not. This paper discusses the structure of the individual AMT and examines the long-run effects of the AMT.