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Alternative Minimum Tax Wounded by Tax Reform, Still Survives

Alternative Minimum Tax Wounded by Tax Reform, Still Survives
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Sunday, 17 December 2017 10:10 PM Current | Bio | Archive

As recently as two months ago, the Alternative Minimum Tax (AMT) was widely considered a prime candidate for total extinction in the tax-reform measure now before the Senate.

But in the final version of the Trump administration-backed tax reform package that lawmakers will soon vote on, only the corporate AMT will be abolished. The AMT on individuals will remain on the books — albeit with its starting threshold an annual income of $1 million, thus dramatically reducing the number of Americans hit by the 47-year-old tax.

When and if the tax-reform package becomes law, these changes will take place immediately.

"Not getting rid of the AMT altogether comes up short in the cause of tax simplification," former Rep. Phil English, R.-Pa., widely considered the father of the "abolish AMT movement," told Newsmax.

But English, who introduced legislation to phase out the controversial tax a decade ago, quickly added that scrapping the corporate AMT is "a big win for the economy" and raising the threshold on applying the tax to individuals "will significantly benefit American taxpayers because "a lot less people are going to be affected by it."

Following a page one story in The Wall Street Journal in 1969 that 155 wealthy Americans had paid no taxes the previous year, Congress enacted the AMT later that year with the goal of making sure all Americans paid some taxes.

The AMT is a supplemental tax for individuals, corporations, estates and trusts that have certain exemptions which allow them to pay lower income taxes. The AMT is applied to an adjusted amount of taxable income in which the exemptions are disregarded.

Over the years, the AMT has been amended and revised. Its latest incarnation was the American Taxpayer Relief Act of 2012, which indexes to inflation the incomes that are subjected to the tax.

But what was originally intended as a tax on 155 of the largest incomes in America is now applied to an estimated four million households who have had deductions removed.

Asked by Newsmax on September 29 whether the AMT would be phased out or scrapped immediately, White House chief economic adviser Gary Cohn replied that its scrapping would be "immediate."

John Gizzi is chief political columnist and White House correspondent for Newsmax. For more of his reports, Go Here Now.

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As recently as two months ago, the Alternative Minimum Tax (AMT) was widely considered a prime candidate for total extinction in the tax-reform measure now before the Senate.But in the final version of the Trump administration-backed tax reform package that lawmakers will...
tax reform, alternative minimum tax
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2017-10-17
Sunday, 17 December 2017 10:10 PM
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