The Alternative Minimum Tax and Effective Marginal Tax Rates

The Resource The Alternative Minimum Tax and Effective Marginal Tax Rates
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The Alternative Minimum Tax and Effective Marginal Tax Rates
Statement of responsibility
Daniel Feenberg, James Poterba
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Contributor
Subject
Language
eng
Summary
This paper examines the impact of the Alternative Minimum Tax on the weighted average marginal tax rates that apply to various components of taxable income. It also considers the impact of several AMT reform proposals on the number of AMT taxpayers, the total revenue collected from the AMT, and the weighted average marginal tax rates that apply to wages, capital income, and deductions such as state and local taxes and charitable gifts. The paper uses the NBER TAXSIM model to project federal personal income tax liabilities as well as AMT liabilities between 2003 and 2013. The AMT has only a modest impact on the average marginal tax rates for most sources of income because some AMT taxpayers face higher marginal tax rates, and others lower tax rates, as a result of the tax. The 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 sixty percent. These changes would also reduce the AMT's impact on average marginal tax rates
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Index
no index present
Literary form
non fiction
Nature of contents
dictionaries
Series statement
NBER working paper series
Series volume
no. w10072
Target audience
specialized

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Context of The Alternative Minimum Tax and Effective Marginal Tax Rates

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