{
  "id": "RL30485",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30485",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 105510,
      "date": "2001-06-12",
      "retrieved": "2016-05-24T20:23:39.535941",
      "title": "The Individual Alternative Minimum Tax: Interaction with Marriage Penalty Relief and Other Tax Cuts",
      "summary": "Tax cuts have been addressed recently. Rate reductions and across the board tax cuts were part\nof\nthe  H.R. 1836 , the tax cut signed by the President on June 7. This bill includes the\nchanges in standard deductions and rate brackets relating to the marriage penalty and also included\nin  H.R. 6 , passed earlier by the House. \n  The Alternative Minimum Tax (AMT) provides for an alternative tax calculation, on a broader\nbase but with a large exemption and a two-tier rate that is below the top tax rates in the regular tax\nstructure. It is paid when the tax liability figured using the AMT base and rates is higher than regular\ntax liability. The AMT is expected to grow rapidly and extend further into the middle class because\nthe exemptions in the AMT are not indexed for inflation. In addition, the tax credits (such as the\nchild credit) enacted in 1997 would have caused many middle class taxpayers to be affected by the\nAMT. A temporary provision allowing these credits to be taken against the AMT was adopted last\nyear, and was made permanent for the child credit by  H.R. 1836 .\n  The marriage penalty legislation, and other proposals for cutting taxes will be limited in their\neffects for some individuals unless changes are also made in the alternative minimum tax (AMT). \nIndividuals who pay the AMT are not affected by cuts in the regular tax and individuals who switch\nto the AMT will not receive the full tax cut. This constraint will grow over time. For example,\nabout 28 % of the tax cuts over the next ten years, in a bill similar to  H.R. 6  considered\nin the 106th Congress would not have been received by taxpayers because of the AMT. This effect\ngrows over time; by 2008, 44% of the tax cut will not have been received. \n  Cuts in regular tax, without also addressing the AMT, would cause more and more taxpayers\nto the subject to the complexities of the AMT, and also increase the revenue costs of future measures\nto restrain the growth of the AMT.  H.R. 1836  partially addressed this issue, by making\nthe child credit apply against the AMT. The bill also increased the exemptions by $2,000 for singles\nand $4,000 for joint returns, but these provisions sunset in 2004.\n  There are a number of different policy options that might be considered in evaluating the AMT\nand its interaction with the regular tax. For some, a priority has been in making the exclusion for\ncredits permanent, while for others indexing may be the most important priority. Both of these\napproaches will be costly in the future (about $26 billion for the credit ten years from now and about\n$14 billion for indexing). Others might wish to eventually phase out the AMT, which will raise\nabout $37 billion by 2010. One can also make a case for expanding the coverage of the AMT as an\neventual flat tax, although in some ways the AMT does not conform to certain design principles\n(such as adjusting exemptions for family size). Another issue is how to adjust the AMT as changes\nin the regular tax system are made, to keep the relative position and original purpose of the AMT\nintact. In the latter case, the AMT might be adjusted when fundamental changes are made in the\nregular tax (rates, bracket widths, standard deductions) but not for proposals that provide special\nsubsidies. This report will be updated to reflect legislative developments.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
      "formats": [
        {
          "format": "HTML",
          "encoding": "utf-8",
          "url": "http://www.crs.gov/Reports/RL30485",
          "sha1": "b7c4127559482793191485f0604b4b8db1d8c1d0",
          "filename": "files/20010612_RL30485_b7c4127559482793191485f0604b4b8db1d8c1d0.html",
          "images": null
        },
        {
          "format": "PDF",
          "encoding": null,
          "url": "http://www.crs.gov/Reports/pdf/RL30485",
          "sha1": "9c879b5affa8b97cb29c2a74618c6f18ff22cd73",
          "filename": "files/20010612_RL30485_9c879b5affa8b97cb29c2a74618c6f18ff22cd73.pdf",
          "images": null
        }
      ],
      "topics": []
    }
  ],
  "topics": []
}