The Alternative Minimum Tax: So much for a smooth start to tax season
Filed under: Tax
As the year-end draws near, lawmakers still can't agree on potential changes to the tax code. The current issue is the Alternative Minimum Tax, AMT for short. The AMT was enacted nearly 40 years ago, and was intended to make sure that high-income taxpayers with lots of deductions still paid a minimum level of income taxes.
The problem is that the tax code hasn't kept up with inflation, and what was once considered "high income" is now applicable to some taxpayers in today's middle class.
Republicans want to change the AMT rules so they apply to higher income earners. Democrats are unwilling to change the rules unless they can collect those taxes elsewhere. Some say the "cost" of changing the AMT rules will be a $50 billion decrease in tax collections each year.
The problem is that the tax code hasn't kept up with inflation, and what was once considered "high income" is now applicable to some taxpayers in today's middle class.
Republicans want to change the AMT rules so they apply to higher income earners. Democrats are unwilling to change the rules unless they can collect those taxes elsewhere. Some say the "cost" of changing the AMT rules will be a $50 billion decrease in tax collections each year.
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