About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

The Potential Distributional Effects of the Alternative Minimum Tax, Date: July 19, 2005 1 (July 19, 2005)

handle is hein.tera/crstax0022 and id is 1 raw text is: Order Code RS22200 July 19, 2005 CRS Report for Congress Received through the CRS Web The Potential Distributional Effects of the Alternative Minimum Tax Gregg Esenwein Specialist in Public Finance Government and Finance Division Summary The alternative minimum tax for individuals (AMT) was originally enacted to ensure that high-income taxpayers paid a fair share of the federal income tax. However, the lack of indexation of the AMT coupled with the recent reductions in regular income taxes has greatly expanded the potential impact of this tax. Temporary increases in the AMT exemption are scheduled to expire at the end of 2005. If this occurs, then certain taxpayers will be more adversely affected than others. In general, married taxpayers filing joint returns will be more adversely affected than single taxpayers. In addition, taxpayers with large families will be more adversely affected than taxpayers with small families. In terms of income, the largest increase in taxpayers subject to the AMT will occur over adjusted gross income (AGI) ranges of $100,000 to $500,000. Taxpayers with AGIs between $50,000 and $100,000 will eventually be affected, with the negative effects of the AMT growing substantially over time. Taxpayers with AGIs above $500,000 will not be significantly affected by the expiration of the higher AMT exemption. This report will be updated as legislative action warrants or as new data become available. Background The alternative minimum tax (AMT) for individuals was originally enacted to ensure that all taxpayers, especially high-income taxpayers, paid at least a minimum amount of federal taxes. However, absent legislative action, there will be a significant increase in the number of middle- to upper-middle-income taxpayers affected by the AMT in the near future. In 2004, about 3 million taxpayers were subject to the AMT, but by 2006, up to 21 million taxpayers could be subject to the AMT. Congressional Research Service oe The Library of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most