Alternative Minimum Tax: Overview of Its Rationale and

United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2001-03-08 monographic deposited born digital 17 p. GA 1.13:GAO-01-500T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-500T P0b002ee18038e9f4 f:d01500t DGPO 2010-08-12 2011-03-23 GAOREPORTS-GAO-01-500T machine generated eng fdlp REPORT GAOREPORTS-GAO-01-500T GAO-01-500T Taxpayers Tax administration Federal taxes Income taxes Tax credit Testimony Alternative Minimum Tax: Overview of Its Rationale and This testimony focuses on the Alternative Minimum Tax (AMT), its interaction with the regular tax system, and its projected growth in coverage. GAO found that (1) AMT was designed to ensure that high-income individuals do not avoid significant income tax liabilities--for tax year 1997, about 14,000 taxpayers would not have paid any income taxes absent AMT, (2) AMT operates as a separate tax system that parallels the regular individual income tax system but with different rules for determining taxable income, different tax rates for computing tax liability, and different rules for allowing the use of tax credits, (3) AMT affected about one percent of taxpayers in 2000 and accounted for about $5.8 billion in additional tax revenue; by 2010, it is expected to increase the tax liabilities of about one out of six taxpayers and account for about $189 billion in tax revenues over the period, (4) the projected increase in AMT coverage is, for the most part, attributable to inflation and to the scheduled expiration of legislation temporarily excluding some tax credits from AMT rules, and (5) AMT's impacts include increased taxpayer compliance burden; increased Internal Revenue Service administrative cost; redistribution of the tax burden among taxpayers; changed economic incentives; and the potential to neutralize, for some taxpayers, changes to the tax system. This testimony summarized the August report, GGD-00-180. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-500T/html/GAOREPORTS-GAO-01-500T.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-01-500T/pdf/GAOREPORTS-GAO-01-500T.pdf GAO-01-500T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-01-500T Testimony GAO-01-500T; Alternative Minimum Tax: Overview of Its Rationale and; Taxpayers Tax administration Federal taxes Income taxes Tax credit