May 24, 2005

The Alternative Minimum Tax

The Tax Foundation has just come out with a study on the alternative minimum tax. The report begins:

The AMT is a tax system that is parallel to the regular income tax. It was originally designed to capture a small number of wealthy taxpayers who were avoiding income taxes, but the AMTs reach has ballooned in recent years.

Until recently, the AMT affected less than 1 percent of taxpayers. Since 2000 the AMT has steadily grown, hitting roughly 3 percent of taxpayers in 2005. If left unchanged, the AMT will penalize nearly 20 percent of taxpayers by 2010some 30 million Americans in total...

I would encourage you to read the entire piece and learn more about the looming threat to middle Americans from the AMT.