Alternative Minimum Tax - The History, the Problem, and Potential Solutions

The Alternative Minimum Tax was created in 1969 as part of a Congressional effort to reduce the likelihood that households with high gross income would pay little, if any, federal income tax. Because key provisions of the tax were not indexed to the Consumer Price Index, the combination of rising real incomes and inflation has led the tax to affect a progressively larger set of taxpayers. In the absence of a short-term "fix"; a temporary increase in the income thresholds at which the AMT applies, the tax would affect more than twenty million taxpayers in 2007.



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