Domestic Taxes

Alternative Minimum Tax bite continues to grow despite fix

{mosads}If the fiscal-cliff deal had not happened, 22.6 million taxpayers would be affected, and 56.3 million would have been hit by 2023.    

The tax was enacted as a way to ensure the affluent would not be able to avoid some basic tax liability by the use of tax deductions. The projected continued growth in the AMT will hit those making between $200,000 and $500,000 per year.

Because the exemption had not been indexed to inflation, more and more middle-class taxpayers were coming under threat as time progressed. For years, Congress passed patches to address the problem.

The change to the AMT has cost the government some significant revenue and has increased the budget deficit. This year, the government would have taken in $33 billion more in revenue without the fix, and by 2023 the difference would have reached $174.3 billion. 

Due to the cost of cutting the AMT back, there is little movement in Congress to alter it further at this point. 


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