Alternative Minimum Tax
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Richard Thomas
EK 21 – Macroeconomics
Professor Bockino
Alternative Minimum Tax (AMT)
The Alternative Minimum Tax was originally designed at targeting wealthy persons with crafty tax advisors or a plethora of tax exemptions. What it is, is an alternative tax calculation providing income tax. When this number is calculated (The AMT) you compare your regular income tax and the newly derived AMT. If the AMT is higher then your regular income tax youre paying, youre required to make up the difference in tax dollars thus paying an AMT tax. The idea behind the AMT is great, but for various reasons more and more people are being required to pay AMT with lower salaries. It was reported that in the year of 2000, 1.3 million people paid AMT. This was a huge spike comparatively
to the number of individuals that paid AMT only 10 years ago (132,000). Although Congress is trying to figure out ways to balance and regulate the AMT the number of individuals