Patricia Cohen reports on President Trump’s proposal to overhaul the alternative minimum tax. At its most basic, the A.M.T.’s goal is simple: to ensure that the richest taxpayers were not able to skip out on paying altogether. A version was introduced in 1969 after Congress discovered that 155 taxpayers with taxable incomes over $200,000 paid no tax.
But critics across the political spectrum have long complained that it has failed to live up to the promise. Both Mr. Trump and the House Republicans’ proposed overhaul of the code would eliminate the individual and corporate alternative minimum taxes.
The minimum tax has gone through several iterations, but the essential intent has not changed: to limit the amount of deductions available to the richest Americans. Over the years, though, inflation has eaten away at its effectiveness — as has the exclusion of interest and dividend income, which insulates the richest Americans.
Posted by Jacqueline Groccia, Associate Editor, Wealth Strategies Journal.