Middle-income Americans beware. The AMT is out there, and it could cost you.
The alternative minimum tax (AMT) was created by Congress to make sure wealthy Americans pay some federal tax, but increasingly it is triggering higher tax bills for middle-income Americans. That’s because it was enacted in 1969 – and failed to index for inflation.
Over the years, Congress has repeatedly “patched” the AMT to protect some taxpayers who would otherwise have been hit. If it does not take action again, the number of AMT-paying filers could surge from 3.8 million in 2009 to 30 million in 2012. That would bring in an estimated $99 billion in federal revenue – but would come from folks who were never meant to pay that much.
Check out our infographic for more on the AMT. See “What Do Others Say?” and add to the discussion below. What should Congress do about the AMT? What does this say about tax fairness?