Alternative Minimum Tax

Repealing AMT: The End of the Alternative Minimum Tax

April. A month typically known for its showers that bring May flowers, tomfoolery on the 1st, and the start of a new professional baseball season. However April is also known as a time that most of us dread, Tax Day. As Americans file their taxes this year, over four million people will encounter an extra surprise from the government, requiring them to pay extra in incomes taxes. Caused by the United States’ outdated duel taxation system, the Alternative Minimum Tax (AMT) has been bringing about disarray in the accounting world for over a decade. Could this AMT be affecting you? Greetings everyone, my name is Marcus Paulson and let me say that it is an honor to take part in Carlson’s 2013 Business Day. I am here today to not only explain why our country’s alternative minimum tax is broken and unjust, but also give a possible solution to the dilemma.

The history of the dual tax basis first began all the way back in 1969 (Goodman.) At that time, all US citizens followed the Traditional Tax Code, which allowed people to partially reduce their taxes through particular deductions. However, over one hundred wealthy individuals founds legal loopholes that allowed them to essentially not pay one cent of Federal Income Tax for the year. The discovery of the rich evading taxes caused a nationwide uproar which led to an immediate tax reform later that year. The Minimum Tax was introduced by the Nixon administration in order to prevent particular tax benefits to high-income individuals. It successfully eliminated the possibility of well-off individuals dodging taxes. The Alternative Minimum Tax that we still use today was passed in 1982, and follows the main premise of the original Minimum Tax law.

Put into simple terms, the AMT is an alternative set of rules for calculating income tax. The rules determine the minimum amount of tax that a high income individual should be required to pay. If they are already paying at...