An AMT Fix Without Higher Taxes

Tax Foundation study outlines a revenue-neutral plan to restore original intent

More On Legal & Compliance

from The Advisor's Professional Library
  • Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law.  The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
  • Meeting and Exceeding Clients and Regulators’ Expectations Although it can be difficult, there are ways for RIAs to meet or exceed client expectations, increase customer satisfaction, and help firms retain current clients and attract new ones.

Congress's original intention when it created the Alternative Minimum Tax, was to make sure that the wealthiest Americans weren't able to combine so many exemptions or deductions that they ended up paying little or no income taxes. In a study released today, the Tax Foundation lays out a revenue-neutral plan to restore the AMT to its original role.

The plan cuts tax rates for low- and middle-income groups, who were never the intended targets of the law, making the overall distribution of the tax burden more "progressive," i.e., shifting the tax burden up the income scale. The majority of individuals in every income group less than $500,000 would get a tax cut.

The report, Tax Foundation Special Report, No. 157, by economist

Gerald Prante calls for four tax-cutting provisions and four expansions of taxable income that offset each other, keeping revenue the same. This proposed solution would be in line with new rules in the House of Representatives requiring that any tax changes produce no change in revenue.

The full study is available here.

Reprints Discuss this story
This is where the comments go.