The Alternative Minimum Tax and Effective Marginal Tax Rates
AbstractThis paper examines how the Alternative Minimum Tax (AMT) affects the weighted average marginal tax rates that apply to various components of taxable income and the subsidy rates on various income tax deductions. It also considers how several AMT reform proposals would affect the number of AMT taxpayers, total AMT liability, and weighted average marginal tax rates. On average, the AMT has only a modest impact on the weighted average marginal tax rates for most sources of income although some taxpayers face substantially higher tax rates, and others substantially lower rates, as a result of the AMT. Our projections show that modest increases in the AMT exclusion level have substantial effects on the number of AMT taxpayers, and that indexing the AMT parameters would reduce the number of AMT payers in 2010 by more than 60 percent.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 57 (2004)
Issue (Month): 2 (June Citation: 57 National Tax Journal 407-27 (June 2004))
Other versions of this item:
- Daniel Feenberg & James Poterba, 2003. "The Alternative Minimum Tax and Effective Marginal Tax Rates," NBER Working Papers 10072, National Bureau of Economic Research, Inc.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
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