Question

In today's federal government, there has been a lot of talk about changing the US Tax Code. Some changes have already been implements and we, as taxpayers, will see how these changes affect us come 2019, when we file our first tax returns under these new provisions. Regardless, there is still talk about wanting to repeal both the corporate and individual AMP provisions.

Find an article or a website that discusses why some policymakers wanted to repeal both the corporate and individual AMT provisions from the Internal Revenue Code. Discuss the justification for elimination as well as any concerns policymakers had about eliminating the AMT.

Answer 1

AMT is a measure used by federal government to make those people pay taxes who uses tax shelters to reduce their taxable income and thus prevent themselves from paying taxes.

However various married couples and single taxpayers who are not very rich and are eligible to claim various personal exemptions are not using anytax shelters to reduce their taxable income are also hardly hit by the provisions of AMT.

Also there are more compliance cost , involvement of more cost and time factor makes AMT cumbersome and thus expensive for both corporates as well as for individuals. Thus, AMT is leading to increased complexity, negative effects on unintended tax payers and compliance problems. In order to curb all these problems, it would be better to repeal corporate and individual AMT.

There are certain concerns regarding repealing AMT

The biggest concern is revenue loss of about $40 billion over a decade due to repeal of AMT. They revenue of federal government will fall which may have other negative result.