Does AMT Really Work?
Q: Many many times, I have read words similar to yours: “The AMT originally was created in an effort to prevent a small number of high-income people from escaping paying any federal income tax.” What I have never read, however, is any discussion of whether it actually achieves this goal. Does it? K.D., Denver A: The alternative minimum tax, or AMT, does prevent some high-income taxpayers from avoiding having to pay any federal income tax. But that’s a dubious achievement. The AMT is nightmarishly complex — and, even more importantly, it ensnares many people who weren’t supposed to be affected by it. As a result, most tax experts I’ve interviewed agree that the AMT is grossly unfair and should be repealed — the sooner, the better. In trying to cure a problem affecting a tiny number of people decades ago, Congress has created a monster. Last year, roughly four million taxpayers were hit by the AMT. Among those most likely to be affected are people who live in high-tax areas, such as Ne
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