Talk:Alternative minimum tax

Untitled

The statement "However, CBO's rules[6] state that it must use current law in its analysis and at the time of the above text was written, the AMT threshold was set to expire in 2006 and be reset to far lower values." is ambiguous. What will be set to lower values, the income thresholds, the tax rate?

Dubious Tag Added

In the "Arguments Against" section, I tagged the bullet that the AMT amounts to a flat tax as dubious; the graph earlier in the article shows the AMT rate increasing (albeit at a decreasing rate) with an increase in gross income. A flat tax would show a constant (independent of income) rate. Sketch051 13:27, 11 June 2007 (UTC)

Sketch051, I made the graph and a made that edit, so I don't think they disagree. But, I can see where you are coming from. A flat tax usually has a cutoff before which it doesn't take effect, i.e. when in the 1980s Robert Hall and Alvin Rabushka presented the idea of a flat tax, and the first about $40,000 were not taxed, this is the same idea. If you have any more questions, I'd be happy to answer them, otherwise, please remove the tag. Pdbailey 02:13, 12 June 2007 (UTC)

I see where you're coming from. I've removed the tag, but also softened the argument ('flatter tax' rather than 'flat tax') to clarify; after all, there are still some deductions allowed with AMT. Sketch051 11:29, 12 June 2007 (UTC)

Additionally, a flat tax - even with the first $X exempt - would show a constant slope in the amount of tax paid, just with a non-zero x-intercept; the graph shows a concave-up curve for the amount paid. Sketch051 17:08, 12 June 2007 (UTC)

Sketch051, look again at the y-axis label, it's in relative terms. It can only asymptote to the level of the flat tax. Pdbailey 02:00, 13 June 2007 (UTC)

I'm referring to the upper of the two graphs, which shows "Tax (thousands)" on the y-axis. A flat tax which simply exempted the first $40k would have an x-intercept of $40k and be a straight line with a slope of the flat rate. The graph shows that the rate continues to increase with an increase in income, and thus is not a flat tax. It does grow slower than the conventional tax curves, so it is a flatter tax, but it is not flat. Sketch051 13:51, 13 June 2007 (UTC)

Ah, I see. The top graph does have the value of the tax in dollar denominated terms on the y-axis. And you are correct that on a graph with linear x and y axises with the income on the x-axis and tax on the y-axis, the line would slop upward with a slope of 0, 0.26, or 0.28 (the tax rates). However, the x-axis is logarithmic, so the slope will increase. As an aside, if you know how to program in a computer language, you could probably read the code used to generate the graph. Pdbailey 14:18, 13 June 2007 (UTC)

I'd missed that. Would you be willing to regenerate the graphs in linear-linear or log-log? I think the average Wikipedian might understand them more intuitively that way. Sketch051 14:52, 13 June 2007 (UTC)

I think log-log is confusing and linear-linear severely reduces the scale that is visible. In the sense that an x-y pair on the graph represents the tax at that level, I think readers can understand a graph--which is to say that I don't think the slope is the idea of this graph, I think the x-y pairs is. Also, log linear graphs appear all the time in newspapers. Pdbailey 15:12, 13 June 2007 (UTC)

You're right, I've been getting distracted by the one point (how 'flat' is the AMT) and have forgotten that the graphs do adequately show that the conventional income tax levels are getting closer to the AMT line over time. I'd still like to leave the change in the Argument Against ("flatter tax" instead of "flat tax") due to the fact that deductions are merely more limited, rather than eliminated see True Flat Tax. Sketch051 18:28, 13 June 2007 (UTC)

I don't object to that wording. Pdbailey 21:12, 13 June 2007 (UTC)

I'll go ahead and object to the whole premise of this argument. Those who support a flat tax do so to promote tax simplicity and/or fairness (related to a uniform rate being applied to all taxpayers without the availability of deductions/exemptions -- which permit certain taxpayers to pay lower effective rates). Since the AMT, on top of the standard tax code, is definitely not simple, and most also find it to be unfair, it is, in no way, an argument that supports the retention of the AMT, nor does any legitimate supporter of a true flax tax want the AMT retained. It's more of a false argument to prevent adoption of a true flat tax.

If you want to maintain a neutral POV, then this point should address the idea that the AMT (via its flatness & limits on deductions) allows Congress to continue to tinker with the standard tax code, creating new deductions for favored groups, yet not giving up too much to any individual taxpayer, since a taxpayer who qualifies for too many deductions will probably find themselves subject to AMT, and will lose the benefit of some or most of the deductions that they thought they had qualified for. This is possibly the most important reason that Congress wants the AMT retained. --Jguild3 13:22, 15 October 2007 (UTC)

The idea of flatness or fairness of the AMT is not that it is maintained "on top of the standard tax code" (the current situation) but keeping the AMT and getting rid of the current tax system. The argument for retention is that the AMT would replace the current system. The argument is for the AMT model over the current income tax, not both. Also, what do you mean by a "true flat tax". If you're stating it in the sense of one income rate applied to everyone, no such proposal exists in congress. There are many flat tax proposals in congress, each with some level of progressivity built in, normally through exemption up to a certain income level. I do agree that the AMT is subject to easy manipulation by Congress (as does any income tax system that allows exemptions or the positioning of one income group against another), just as the current system progressed from Reagan's change into today's 65,000 pages of tax code. However, wikipedia is not a crystal ball and should not forcast on what could happen. Morphh ^(talk) 15:23, 15 October 2007 (UTC)

NPOV

This page needs updates. As it is, it does not comply with the NPV rules.

Edited to remove non-npov statements made at end of previous edit without citations.

I just edited the article to try to improve the NPOV situation. Please make comments on my success here. Pdbailey 14:56, 3 November 2006 (UTC)

I just put an NPOV template in the bottom section which seems pro-Republican and anti-Democrat.Squad51 18:29, 5 February 2007 (UTC)

I just moved the template to the whole article; another sections seems to imply that it damages the economy, which I would tend to disagree with. This article is also too technical and needs some cleanup.Squad51 18:34, 5 February 2007 (UTC)

Can you specifically state what you think the problem is? On the section you just NPOVed.... the AMT hits medium to high income individuals and families with large income tax deductions. Because state income taxes are deductible from federal income taxes, the AMT has a tendency to hit individuals in high tax states, such as California, New York, New Jersey, etc... As it turns out, these states tend to be on the coast and generally vote for democrats. Maybe its a bit cynical, but Republicans, who are normally concerned with high taxes, have been less concerned with the AMT. Mgunn 18:49, 5 February 2007 (UTC)

On the harm from the AMT... Any tax causes distortion of economic activity, and economic theory says the harm increases with the square of the tax rate. Any non-Pigouvian tax is automatically harmful. The general policy question is whether the government spending is worth more the harm caused by the tax. That said the AMT has some structure that is considered less harmful than the standard tax system (it has fewer deductions) and some features that are considered more harmful (poor treatment of savings, rates might be excessively high). -- Mgunn 18:49, 5 February 2007 (UTC)

So it seems the NPOV tag has been removed, but I'm certainly not satisfied, and I'm not sure why it's been removed. It's worth noting, for example, that criticisms abound, but nowhere in the article is a defense of the AMT presented -- and certainly this isn't because defenses of the policy don't exist. I'm putting the template back. Pstinchcombe 21:08, 24 February 2007 (UTC)

I removed the NPOV tag, I feel the article is nonbiased, perhaps the next time you put it back on, you should justify why, you feel its NPOV, the only defense of the policy is lost money to the government. --208.54.14.27 01:52, 22 March 2007 (UTC)

_______________

Just a reader here ....

You write "The burden of computing AMT and the disallowance of deductions for state and local income taxes magnify criticisms of the AMT." and then only expand on the disallowance of deductions, not the burden of computing the AMT.

What's the cost in lost productivity, increased cost of prepared returns, trees wasted as paper? My own experience suggests it adds about 1/3 more pages and at least that much cost to my prepared returns.

Thanks!

_______________

More and more individual taxpayers are falling into what is be called the "AMT" trap. For many taxpayers, the common question is, "How do I avoid AMT". So how do you avoid AMT, simple have less tax preference deductions on your Schedule A. The biggest tax preference item on your Scedule A is state income taxes and real estate taxes. In any given year, if your Alternative Minimum Taxable Income (AMTI) is greater than your Regular Taxable Income, you may want to push your last real estate tax payment and state estimated taxes into the upcoming year. If the upcoming year is projected to have more income than the current year you should do it since there would be no tax benefit in the current anyway.

For more information about AMT contact Brian McGovern at www.mcssllc.com.

_______________

The following appears to be a collection of subordinate clauses and prepositional phrases: "For example, if an asset (stock or bond) holder would pay less taxes than they would lose in value if they were to hold a losing stock until you can balance the sale of the money losing stock with the sale of a money making stock during the same tax year. " I am unable to identify the subject and predicate here. "A verb, Senator Kennedy... We need a verb." - Gary Trudeau

131.81.200.158 15:06, 22 November 2006 (UTC)

NPOV 2010

I have added POV flags to the "controversies" related parts of the article. These clearly express particular points of view without indicating such. Further, the size of these in relation to the article raises significant undue weight issues. These sections should collectively be replaced with a short paragraph indicating that controversies exist and no concensus exists.Oldtaxguy (talk) 20:14, 21 April 2010 (UTC)

I don't think that it's unclear to the reader that people critiquing or defending the AMT have a point of view. In fact one expects a tax system that brings in more income than the regular tax to have supporters and detractors which we can and should capture. In Wikipedia we present different sides of debated issues all the time. Why wouldn't we do that here? I do think someone as experienced as you are could help clean things up and sharpen the article, but not to the point that we only say it's a controversial tax and there's no consensus.Mattnad (talk) 20:43, 21 April 2010 (UTC)

figure

I just added a figure and would love comments on it. If anyone can see errors in my calculation or wants to see changes you can either make them (I've included the code, and you can edit it are run it in the GPLed statistics programing language called R) or you can make comments and I'll try to incorporate them. Pdbailey 18:11, 22 March 2007 (UTC)

recent edit by 134.173.152.125 in ``Arguments against repealing the AMT''

134.173.152.125 just removed "Repealing the AMT would be decrease revenue more than repealing income tax itself." [1] with a edit comment that, "mis-cites source, absurd conclusion." The Washington Post writes, "By 2008, it would cost the Treasury considerably less to repeal the ordinary income tax system than the alternative minimum tax, according to the Tax Policy Center, jointly run by the Brookings Institution and Urban Institute." I think this is a reasonably faithful reproduction of the claim, am I missing something? Pdbailey 00:42, 28 March 2007 (UTC)

Does anyone agree with the edits of 134.173.152.125? It's been a few days and I've gotten no response so I'm tempted to add the text back.Pdbailey 12:21, 29 March 2007 (UTC)

I read the source and do think that it is worth having in the article, however, it needs to state that this is the opinion of the Tax Policy Center. Morphh ^(talk) 13:06, 29 March 2007 (UTC)

I was confused because of the wording. I read "income tax itself" as equaling non-AMT tax plus AMT tax, since AMT is a part of the total income tax revenue. With that interpretation of the wording, it doesn't make sense that repealing AMT (a part of income tax) would cost more than repealing the entire income tax system. I support the re-inclusion of the text so long as it is reworded to avoid ambiguity. Perhaps it could say something like "Repealing the AMT would decrease revenue more than repealing the ordinary (non-AMT) income tax system." —The preceding unsigned comment was added by 134.173.152.125 (talk) 21:01, 2 April 2007 (UTC).

I think what would be best is if you read what is on the page now and raise concerns here. Pdbailey 23:39, 2 April 2007 (UTC)

I suggest the sentence in question be remove again. Washington Post article did not provide a reference link back to the original research it sites so I could not determine how that conclusion came about. My problem is not with the accuracy of the statement "...considerably less to repeal the ordinary income tax..." but without explaining what happens when oridinary income tax is repealed, it may lead to wrong conclusion. Here's one version of what may happen when ordinary income tax is repealed.

Before the repeal, people pay ordinay income tax.

After the repeal, some pay AMT which is more then their ordinary income tax. The rest pays no tax since they are below the AMT bracket.

The result is considerable less people are paying taxes but they have to pay more of them. Net result is a loss of $X tax revenue for IRS but this amount is more if AMT was repealed instead. But the hidden truth is the extra cost is now being bared by middle class tax payers.

The above is just one possible ways to calculate the cost of repealing ordinary tax. I do not know what calculations were used by Tax Policy Center to draw its conclusion and that's what I have a problem with.NYCDA 18:38, 21 September 2007 (UTC)

The statement "Repealing the AMT would be decrease revenue more than repealing income tax itself" is technically correct but highly misleading. The problem centers on the dual meaning of AMT. AMT is technically the excess between Tentative Minimum Tax (TMT) over the regular tax. But most of the time people use the term AMT for both AMT and TMT, leading to much confusion. If you were to retain the TMT and zero out the regular tax, revenue would at some point drop more than if you were to retain the regular tax and zero out the TMT. But in the former case ("Repealing the AMT"), the AMT line on your 1040 would skyrocket, changing from a relatively small add-on tax into your entire tax liability. Because of the structure of the calculation, repealing the regular tax and "leaving the AMT unchanged" would not leave the AMT liability unchanged. Far from it. Instead, it would create a huge increase in AMT liability, in the amount of the entire regular tax liability for all of today's AMT taxpayers. It's not the case that today's aggregate AMT liability is anywhere near aggregate regular tax liability. A statement that "Zeroing out the TMT would be decrease revenue more than zeroing out the regular income tax liability" would be accurate without being misleading, except that very few people have any idea what the TMT is. By the time they understood what the TMT was they would no longer be stupefied by the claim. Pdbailey was wise to be skeptical.AMTbuff 23:57, 14 November 2007 (UTC)

arguments against

An anonymous editor just removed the emphasized portion of , "While many parties agree that the AMT needs to be changed, some argue against its outright repeal. The Center on Budget and Policy Priorities states that because households with annual incomes above $200,000 are the source of more than half of all AMT revenue, more than half of the benefits of repeal would go to high-income households. In addition, they state the cost of repeal is prohibitive," without comment. I'd suggest it is a regression and the original text before the edit should be reinstated. Anyone else have an opinion, or does the anon. editor want to explain the edit? Pdbailey 02:43, 28 May 2007 (UTC)

I think the article was so far better before that the edit may or may not have been vandalism, so I did the rv after 24 hours of no comments. Pdbailey 03:57, 29 May 2007 (UTC)

My RV was just RVed by 146.209.130.1. based on a glance at that editors other edits, it isn't primarily a graffiti account, so I'll take it as an awkward edit in good faith. I requested comment from that editor and await it here for at least 24 hours. But anyone who can say why removing that section is welcome to comment.Pdbailey 18:19, 29 May 2007 (UTC)

I'm not sure why it was removed but validating the data and finding a source for it would be a first step. It might have been better for them to add a {{fact}} tag but it appearrs the editor thought the information to be untrue (or perhaps just a bias statement). Morphh ^(talk) 22:22, 29 May 2007 (UTC)

Did you read through the reference provided? I think it's quite clear. If you disagree, maybe there's something here. Pdbailey 22:37, 29 May 2007 (UTC)

Ahh didn't notice that it was after the next sentnece. I'll try to have a look later but my initial thought was that it was unsourced. Morphh ^(talk) 23:22, 29 May 2007 (UTC)

Reforming the AMT

What do you think of a new section on proposals to reform the AMT? Several policy groups on both the right and left have offered solutions, and it might be helpful to sketch these since it's becoming a bigger issue. RS102704 15:29, 26 July 2007 (UTC)

Makes sense. Morphh ^(talk) 15:41, 26 July 2007 (UTC)

Rambus Engineer Suicide

Do we really need the teer-jerker tale of an engineer at the Rambus corporation's suicide? It doesn't take a genius to realize that this suicide was totally about the fact that Rambus stock plunged when it became clear that Rambus wasn't going to be allowed to shove the overpriced, under-performing RDRAM standard down consumers throats by banning DDR and persecuting motherboard makers who enabled 133MHz SDRAM. Doesn't anyone else remember the performance and cost issues with RDRAM? In any case, the suicide wasn't about a tax liability so much as it was about a decision to: 1. Quit his job at age 53, which he called retiring. (A dozen years early) 2. Hold onto a stock thinking it would keep skyrocketing in value. 3. Completely ignore the fact that he could be totally bankrupt and still have A DEGREE FROM M.I.T. -and- an awesome resume. He had a lot to keep living for. His suicide wasn't caused by a tax law, it was caused by low self-esteem, a failure to realize the value of his personal assets that couldn't be taken from him, and some really bad stock decisions that wiped out his dream. —Preceding unsigned comment added by Zaphraud (talk • contribs) (30 July 2007).

I removed the section because the logic was not strong, and it was labeled "recent" but was clearly over 5 years old. Pdbailey 13:24, 31 July 2007 (UTC)

Arguments against - neutrality

Arguments against APPEALING; I typed the link wrong.

I added a pov tag to this section. Arguments like "More than half of the AMT is paid by those with income over $200,000 per year, helping make the overall taxation system more progressive." imply that progressive taxation is good, so some people just support it as a means of progressive taxation; it isn't even an argument for keeping the AMT. That statistic should probably be moved somewhere like Taxpayer incomes. 171.71.37.207 18:10, 27 August 2007 (UTC)

I agree that the arguments appeal to partisan sentiments, but I think both sections are that way. Examples include concern for double taxation (Think about it, many american pay (1) income tax (2) sales tax, that's double taxation too). Another one of the prorepeal arguments talk about howmany people will have to pay it, what's that got to do with anything. I strongly disagree with the neutrality tag and propose it's removal. Pdbailey 19:09, 27 August 2007 (UTC)

In that case, both should get cleaned up. I agree that double taxation isn't really a valid criticism. Moreover, I'd support changing these (in Criticisms) to:

• The Congressional Budget Office estimates that in 2006 34.6% of taxpayers in the $50,000 to $100,000 AGI range will owe AMT (if the "patch" law is not applied again).[9], and 11 percent of all tax payers will owe the AMT.
• The IRS estimates that by 2010, 34% of all individual filers who pay income tax will be subject to the AMT

to

• The AMT has expanded far beyond its intended purpose--taxing a small number of high-income households--having recently (2006) affected 34.6% of taxpayers in the $50,000 to $100,000 AGI range.

171.71.37.207 19:52, 27 August 2007 (UTC)

171.71.37.207, I disagree that because you have to have a private sentiment about something to appreciate an argument for or against something that implies that it shows POV. Maybe it would help if you pointed to the portion of the POV section that says this. Pdbailey 03:49, 28 August 2007 (UTC)

So in the example I pointed out, "More than half...," it was actually two facts, not an argument, or a fact that <person> argues <point>. Reading the source, the information is presented as facts (which they are). It doesn't try to argue anything, mainly talk about facts and dispel myths. In hindsight, maybe an OR tag would have been better. Correctly cited, I would rather see something like "Some wish to keep the AMT as it implements progressive taxation," but that contradicts "The AMT amounts to a flatter tax." Maybe the rebuttal "Since more than half of the collected AMT is from those with > $200,000 income, its effect on those with lower incomes is small" is better. 171.71.37.207 20:24, 28 August 2007 (UTC)

I agree with you in concept, but I think the execution changes the implication in the exact opposite way, and I agree with you about the best solution. BTW, flatter is more about those who are affected by the AMT, which could mean more progressive if richer people otherwise would have lower taxes. Pdbailey 02:11, 29 August 2007 (UTC)

I don't expect my change to be gospel, by any means. It was more about removing OR. Please add, modify, undo, etc., provided there are sources behind it. The article on proportional tax says that a flat tax is a tax that is neither progressive nor recessive. I have no idea what the AMT does, there, just that two arguments contradicted each other. I may very well have removed the wrong one. 171.71.37.207 18:15, 29 August 2007 (UTC)

Well, it's a bit of both. The AMT is mostly flat, but it: 1) doesn't apply to people making below its threshold, so is progressive in that sense; and 2) is mildly progressive even above its threshold since the rate for AGIs above $175k (28%) is slightly higher than that for AGIs below $175k (26%). --Delirium 15:33, 22 October 2007 (UTC)

34% of all filers

I just removed the following, "The IRS estimates that by 2010, 34% of all individual filers who pay income tax will be subject to the AMT." because it doesn't have a reference. Please provide one before including it again. Pdbailey 15:59, 30 August 2007 (UTC)

Yes genius, the number is only 27.4 million. Here is your reference: (http://www.taxpolicycenter.org/briefing-book/key-elements/amt/what-is.cfm) I expect the number has slipped from 30-28 million because more & more are unemployed. Then again, what is the number of people that work for a living? Maybe 27.4M is a reasonable 34%?

At this point, people in the middle class aren't going to invest in any of it. Your reference can be me for this statement. I feel there is enough people like me that spending money at this time is too costly. After all, paying taxes you condone are too high.

I had to take standard deductions last year because I paid off my house. Next year I pay 60-70% more tax due to not renewing the "fix". I was still planning to take standard deductions (fair enough), but was surprised by the AMT hitting me even though I take none of the listed deductions specified in this tax. In filling out taxes, unless you reduce enough to cover it all, you will pay the entire AMT amount; it is actually based on a '70's income, not reality. Why do you feel I should pay 60-70% MORE tax than the year before simply because YOU want more money? I am not in the 200K to 1M+ revenue category you think you are attacking. It is time for this country to grow up & reduce government costs instead of taxing the 50% that pay taxes more & more & more... By taking away excessive amounts of money as tax, you shut down all the middle income people that want to improve their homes, buy a vacation home, help neighbors and improve their neighborhood to name a few things. We fear to spend money on these things because people like you want to steal it away to give to those who make no effort to contribute to society. That means people in a tax payer's area does not give his/her spending to stay in the local economy because the feds are choosing how it should be distributed nationwide.

So in effect, since you have taken any discretionary money from everyone, there will be no money for local communities to grow. Congratulations PDbailey, you have made all of us the socialist equivalent: No matter who has worked for a better life, all should share in their success regardless of their effort.

One final note: There are so many statements made, but this one really fits the situation: "When a government takes over a people’s economic life it becomes absolute, and when it has become absolute it destroys the arts, the minds, the liberties and the meaning of the people it governs." —Preceding unsigned comment added by 24.245.16.35 (talk) 05:54, 31 August 2010 (UTC)

Arguments in favor of the AMT

I edited the reference to the AMT serving to flatten the tax burdens amongst taxpayers. The comment made it appear that the AMT increased the "simplicity and apparent fairness" of the tax code. While certain flat tax proposals would make for a simplified taxpayer experience, the AMT actually adds complexity. 128.192.120.180 19:32, 1 October 2007 (UTC)

Can someone tell me how/why this argument is presented in favor of the AMT: "More than half of the AMT is paid by those with income over $200,000 per year." So what? How is this an argument? It's simply class warfare. So if someone makes more than $200,000 a year, they should get screwed over and pay a higher percentage AND higher total amount in taxes?

If this statement remains, how about we add the inverse to the "in favor of repealing" list: Less than half of the AMT is paid by those with incomes less than $200,000 per year. It's equally as pointless. —Preceding unsigned comment added by 64.81.34.196 (talk) 00:02, 27 December 2007 (UTC)

simplify beginning?

This article is great, and all, but it doesn't succinctly explain right off the bat what the AMT *IS*. It should probably explain this in the first few sentences, but it doesn't, really, it's like, "this is a tax that exists." What about how it is assessed-- shouldn't this go somewhere earlier, too? Lequis (talk) 02:05, 19 November 2007 (UTC)

Good points. I also think the lead is much too long per WP:Lead; anyone disagree? Alice^✉ 03:39, 14 December 2007 (UTC)

You are both right. Also, I'd say pitch the USC references until after the lead. While they are authoritative, they are also inscrutable. Pdbailey (talk) 14:27, 14 December 2007 (UTC)

I have moved most of the Intro into a new section 1. This entry does a good job of summarizing the debate over the AMT, and a very poor job of describing just what the AMT is. I am confident that any tax guide (such as Lasser's) does a good job of explaining to educated lay people just how the AMT works. After all, the AMT is controversial precisely because it now hits most successful business and professional people.

The USC is indeed at once definitive... and inscrutable. That's why this entry should also cite the instructions to 6251, and even a mass market tax guide. This entry includes one reference to the academic literature in economics, Mac Colell et al (1995). This is overkill; very very few readers of this entry could make sense of this PhD level text. You don't cite a textbook on quantum mechanics to explain the difference between AC and DC current! It would be much better to cite any standard undergrad text in public finance, a very applied branch of economics that studies actual and ideal tax systems. An example of what I have in mind is the text by Harvey Rosen.132.181.160.42 (talk) 21:23, 20 December 2007 (UTC)

The article does not go into enough details related to the impact of standard deductions. A family with six children and three of them in college with low mortgage debt but an overall self employed family income of $160,000 is denied the dependent deduction as well as any deductions related to the college expenditures. A deeper dive into the lack of clarity behind what deductions that actually trigger the AMT is needed. Sept 24 2008.

The AMT can strike in so many ways that it's difficult to cover the bases here. What may be helpful, if you like, is to find external sources that cover particular instances in detail, and then we can have a high level summary and external link. Your example above is very particular and I'll even hazard a guess that it's from personal experience. A more general example are people who live in expensive, high tax states (like the Northeast) who are hit due to high state and local taxes and have a couple of children. There you have the trifecta of higher incomes (as required to live in these states), plus deductions for taxes and children. Then it's Bingo - AMT bills and sometimes penalties - woo hoo. Mattnad (talk) 17:52, 24 September 2008 (UTC)

Neutral point of view does not prohibit non-neutral information from liberal think tanks

A new, anonymous editor removed certain information on dubious grounds. I restored the information. As odd as it may sound to a newcomer, there is no rule in Wikipedia that prohibits "non-neutral, politically motivated information." Neutral point of view does not require that the SOURCE be neutral. In Wikipedia, neutral point of view requires only that Wikipedia editors craft articles in neutral language. The fact (assuming that it is a fact) that "CBPP, Tax Policy Center, and Brookings/Urban are all widely recognized as liberal think tanks" does not disqualify their use as sources in Wikipedia. Please review the Wikipedia policy on Neutral Point of View. Famspear (talk) 22:22, 4 January 2008 (UTC)

Here's the rule:

As the name suggests, the neutral point of view is a point of view, not the absence or elimination of viewpoints. The neutral point of view policy is often misunderstood. The acronym NPOV does not mean "no points of view". The elimination of article content cannot be justified under this policy by simply labeling it "POV". The neutral point of view is a point of view that is neutral, that is neither sympathetic nor in opposition to its subject. Debates within topics are described, represented and characterized, but not engaged in. Background is provided on who believes what and why, and which view is more popular. Detailed articles might also contain the mutual evaluations of each viewpoint, but studiously refrain from asserting which is better. One can think of unbiased writing as the fair, analytical description of all relevant sides of a debate, including the mutual perspectives and the published evidence. When editorial bias toward one particular point of view can be detected, the article needs to be fixed.

See:

http://en.wikipedia.org/wiki/Wikipedia:Neutral_point_of_view

Yours, Famspear (talk) 22:28, 4 January 2008 (UTC)

In other words, if a liberal think tank supports a particular position about whether the Alternative Minimum Tax is good or bad, it is OK to document that in Wikipedia with an adequate description that it is the liberal think tank that is taking that position. You cannot delete "points of view" in Wikipedia merely because they are liberal, conservative, leftist, rightist, etc. Neutral point of view does not mean the absence of bias in the SOURCE MATERIAL. Neutral point of view means that Wikipedia itself does not take a position that this source's viewpoint is correct, or that source's viewpoint is incorrect. Yours, Famspear (talk) 22:32, 4 January 2008 (UTC)

AMTbuff joins the crew

I post as AMTbuff on fairmark.com and reformamt.org. I have a fairly comprehensive knowledge of the AMT, but the real go-to guy for AMT is Kaye Thomas. He runs the fairmark.com site, which provides world class tax information to the world for free. I've never met him in person, but Kaye is the one guy I'd trust for any answer on any tax question, especially AMT. I've never seen him make an error.

I'd like to volunteer for any and all technical improvements to this article. Let the suggestions begin. I've started by adding an explanation of the AMT exemption, its phaseout, and the effect on effective marginal rates. I also added some information on minimizing AMT, although there's actually precious little you can do once the AMT catches you. Feel free to edit anything I write for style, since my writing is often too informal. Oh, and I may be gone for days or weeks at a time, but... I'll be back. —Preceding unsigned comment added by AMTbuff (talk • contribs) 06:01, 16 January 2008 (UTC)

This page was some what unclear

An example would help. Take a simple tax case and list income tax and AMT tax.

'However, the AMT Exemption is phased out at 25 cents per dollar '

(you never list what the base exemptions are.

Also what is the 26 /28 % cut off?

71.123.131.239 (talk) 15:07, 9 February 2008 (UTC)

I have added the specifics. I have seen many examples of AMT calculation, but they never seem to improve understanding of what is actually going on with the AMT. AMTbuff (talk) 18:18, 1 May 2008 (UTC)

Didn't Congress Put an injunctionon the AMT for the Tax year 2007

Didn't congress "temporarily" repealt the AMT for the 2007 tax year ordid that not pass? I seemto remeber it was all over the news a few months back?--Dr who1975 (talk) 19:46, 9 March 2008 (UTC)

Dr who, you may want to use the [thomas.loc.gov/ library of congress] website to find a bill that was proposed but did not pass. Looking at the 2007 tax forms, the AMT has not been repealed. Pdbailey (talk) 04:21, 10 March 2008 (UTC)

Arguments against repealing AMT

I don't follow Pdbailey's objection to the change in this section. I agree with the point in his comment, I just can't see how it is connected to the specific deletion at issue.

The phrase I had deleted, but which Pdbailey wants to keep in, is "The expansion of the AMT was intended by Congress to make the Bush tax cuts more affordable", citing a CBPP source. Pdbailey's comment is "in budgeting, the amount of inflow is critical, this is a huge argument".

Fair enough, but:

(1) The disputed sentence is a statement of fact about something we can only speculate on, i.e., Congress's intentions. (Unless Congress includes a specific finding of fact, or "whereas" clause, which thye did not in this case.)

(2) The disputed sentence does not accurately reflect the argument in the cited source. (That argument has even more problems.)

(3) The section title is "arguments against repealing AMT"; almost nobody really is against repealing AMT on the grounds that they want to preserve the Bush tax cuts. (Well, maybe the Wall Street Journal editorial writers, but that's it.) The Congreessional Republicans cited in the CBPP source wanted to repeal the AMT. The CBPP certainly doesn't want to preserve the Bush tax cuts. So even if this argument fit somewhere, it wouldn't be here.

(4) Pdbailey's comment is on the overall budgetary effect of repealing the AMT. That really is a major argument against repeal. But it is already listed in this section, as the last bullet point. (Maybe it should be the first bullet point?) Repealing AMT would cause a massive increase in the (official) deficit, because the (official) deficit assumes revenues based on the AMT reverting back to its official long-term form (AMT exemption of 45000 for MFJ, etc.). Every budgetary decision for the past 20 years has made this assumption, so of course spending levels have been based on the assumption that the AMT will continue. PMcGarrigle (talk) 17:15, 27 January 2009 (UTC)

• Comment - Re Point 2 parenthetical comment: In other discussions, I've noted that you remove reliable sources because you personnally think they are wrong / incorrect. Your disagreement with a source is not grounds for removal in Wikipedia. See WP:RS. Mattnad (talk) 17:56, 27 January 2009 (UTC)

Mattnad, I acknowledge your point that sources shouldn't be removed just because people disagree with them. But (a) the source hasn't been removed: it is cited twice more in this same section; and (b) it really was a parenthetical comment: the cite was removed because the sentence referring to it (inaccurately) was removed. If someone else would like to put in a sentence that (accurately) summarizes "Myth 2" in the cite, I won't remove it but will have some other cites to show why it is inaccurate. PMcGarrigle (talk) 18:31, 27 January 2009 (UTC)

• I noticed a recent addition of arguments against the repeal that suggests that the AMT prevents a wealth transfer from low tax states to high tax states. There needs to be source for that statement because the states with the highest state and local taxes are also the ones with higher incomes subject to federal taxes. Per the Tax Foundation analysis, currently states like California, New York, and New Jersey are at the bottom of net federal tax receipts. [[2]] For this reason, I'm going to remove that paragraph pending a reliable source (see WP:RS) that supports that statement.Mattnad (talk) 17:20, 20 August 2009 (UTC)

Internal contradiction

Something should be done to reconcile these two claims, or they should both be removed:

Advice to accelerate income when you will be liable for AMT is therefore exactly backwards for most taxpayers.

and

Another way to avoid AMT liability is to stay out of the $150,000 to $415,000 income range. For example, it might be better to realize a $1 million capital gain all in one year rather than dividing it into two or three years.

Does anyone know if either of these pieces of advice has any merit or how we might give them appropriate coverage? -- The_socialist ^talk? 06:27, 8 February 2009 (UTC)

These are both correct. The first is explained in the sentences immediately preceding it. For the second item, rather than refer to my own writings, I have added reference to a John Poterba paper. Page 22 of that paper mentions the marginal rates of 32.5 and 35 percent (which exceed the regular tax bracket rates below $300k or so). Page 14 says "At AGI levels above $500,000, the progressivity of the personal income tax schedule makes it likely that for most taxpayers, personal income tax liability will exceed tentative AMT liability." The range is not a precise one, depending somewhat on the taxpayer's specific situation, especially the state income tax rate. For states with high income taxes, the range extends to infinity.--AMTbuff (talk) 18:56, 28 February 2009 (UTC)

Criticisms and Controversies / Taxpayer Incomes

I added a "dubious" tag next to the "hence" in the passage:

The deduction for state and local taxes in the normal income tax code can encourage wealthy areas to raise taxes and, in effect, redirect monies that would normally go to the federal government (and hence[dubious – discuss] to residents of poorer states) to their state and local governments, where it can be spent on their own citizens.

"Hence"?

The argument seems to me to be far-fetched anyway. A better argument is that when state and local governments spend extra money, some of the benefits flow back to the taxpayers themselves. If a state decides to offer heavily subsidized public transit, paid for out of state tax receipts, then taxpayers benefit to the extent they use public transit. Similarly for libraries, parks, and so on. PMcGarrigle (talk) 20:37, 12 February 2009 (UTC)

I replaced this paragraph with equivalent words from the first Tax Reform study in 1984. I agree that the argument is not a slam dunk, but IMHO it's no more of a stretch than the rationalizations for other tax increases as merely closing unjustified "loopholes". Proponents of eliminating the state and local tax deduction lost out in the 1986 Tax Reform, but they won a concession by eliminating these deductions in the TMT computation. That, coupled with the non-indexation of the TMT, amounted to a slow-motion repeal of the deduction for state and local income taxes. This was very much intentional, not an unintended consequence.--AMTbuff (talk) 02:28, 1 March 2009 (UTC)

Nice quote; it greatly improves this section.

Also it seems closer to the argument I suggested above was better (benefits of state and local spending flow in part to the taxpayers themselves) than to the one I marked dubious (disallow state & local tax deductions to increase federal tax revenue and "hence" increase spending on residents of poorer states). PMcGarrigle (talk) 20:28, 5 March 2009 (UTC)

link to Fairmark

My objections to this link are from WP:SPAM

(1) A featured article would not link require a link to this page

(2) There is a large amount of advertising on the page

(3) There are links with referral codes. These are in adds, and I am not sure if this means that the rule applies or not (I asked on the discussion page for WP:SPAM).

I can understand disagreeing with (2) and (3) as I said is unclear, but I really don't understand the argument against (1). It is worth pointing out that Wikipedia is not a list of useful links and the fact that something is worth reading is not prima facie evidence that Wikipedia should link to it (see WP:NOT). PDBailey (talk) 01:45, 2 April 2009 (UTC)

From the Wikipedia guidelines on external links (which you cited earlier; I don't have the link at hand):

"Such pages could contain further research that is accurate and on-topic”

"What to link There are several things that should be considered when adding an external link. • Is the site content accessible to the reader? • Is the site content proper in the context of the article (useful, tasteful, informative, factual, etc.)? • Is the link functional and likely to remain functional?"

"What should be linked … 3. Sites that contain neutral and accurate material that cannot be integrated into the Wikipedia article due to copyright issues, amount of detail (such as professional athlete statistics, movie or television credits, interview transcripts, or online textbooks) or other reasons."

The Fairmark site is accurate and on-topic; very much so, in fact. The site content is accessible, and the link is functional and likely to remain functional. The site content is (almost entirely, though not quite entirely) proper in the context of the article. (Very occasionally there is some more general political commentary, which is below the standard of the rest of the site (in my opinion).) The content cannot be integrated into the Wikipedia article because it's a running guide to developments in AMT and other tax law (and thus fits into "other reasons" in the criteria). PMcGarrigle (talk) 16:55, 2 April 2009 (UTC)

PMcGarrigle, thank you for taking the time to write a response and for not just RVing my edit. I am now largely convinced on (1). What do you make of the apparent conflict between text you included and the featured article criterion I pointed to?

By a crude measurement, about 1/2 of the page is advertisements, this seems heavy but none of them dance or the like so this decreases their offense and the banner advertisement is for the site per se. I don't know where the line is on this. As for the third point, I have no additional information, I will get back to you if someone responds. PDBailey (talk) 18:06, 2 April 2009 (UTC)

Fairmark is run by Kaye Thomas, who I believe does it more as a labor of love than for profit. The guy is brilliant, yet he takes the time to answer all kinds of tax questions for free on his forums. I've never seen him give a wrong answer. Never. There is no better site anywhere for tax information, and it's free. Yes, he sells a few books. Presumably that lets him write off the cost of the website. I think we should cut him a break because he's performing an immense public service. Besides which, he is the country's number one authority on practical aspects of the AMT. BTW, his recent political commentary was actually a parody of others' over-the-top political commentary, which he was getting tired of. Kaye is so apolitical online that I don't have a clue what party he belongs to, if any. I have no affliation whatsoever with Kaye Thomas or fairmark other than being very impressed. Bottom line, readers of this article will benefit greatly from a visit to fairmark and its forums. AMTbuff (talk) 20:47, 2 April 2009 (UTC)

Pdbailey, I'm not sure how to resolve the contradiction. But since external links are allowed and used, there must be some conditions in which they're acceptable. I would have to assume the intention is that a small number of links to unusually informative other sites is acceptable, because even a featured article (or a printed encyclopedia article, or a book) could reasonably refer to such a link. In that case, this site should make the cut, if for no other reason than the fact that the IRS web site is hopelessly inadequate in AMT guidance. On the advertising, it occurred to me that references to newspaper articles are allowed, despite all the advertising they carry, so advertising shouldn't automatically disqualify a site.

AMTbuff, I don't mean to criticize Kaye Thomas, who is as you point out providing a very high quality service for nothing. It's his web site and he can comment as he likes on it. To me, it's jarring because on topic he is very knowledgeable and very measured, and in his occasional political commentary (in my opinion) he isn't either of these. But hey, nobody is forcing me to read it. I agree that anyone who actually might have to pay AMT should absolutely visit Fairmark. PMcGarrigle (talk) 23:44, 2 April 2009 (UTC)

Okay, I guess since it is 2v1 on the advertising we can let that go too. I say we keep one link on the page unless/until we get a negative response on the spam talk page. I will put it back. PDBailey (talk) 00:57, 3 April 2009 (UTC)

Avoiding AMT section

The Avoiding AMT section is written in second person and purports to give advice to the reader. It reads like it would belong much better on something like WikiHow than in an encyclopedia. John Darrow (talk) 18:32, 18 April 2009 (UTC)

Agreed, I think it should be moved or reworded so as to avoid WP:NOTHOWTO? PDBailey (talk) 23:39, 18 April 2009 (UTC)

I reworded it remove the second person. If we ever get a WikiHow article on the AMT, then moving it there would be appropriate. That will likely be years from now, and we can all hope that the AMT will be history by then. AMTbuff (talk) 16:52, 24 August 2009 (UTC)

NY Times a Reliable Source

The continued efforts of User:PMcGarrigle to remove sourced and topical content from this articled is now a discussion point here: Wikipedia:Reliable_sources/Noticeboard#New_York_Times_Article_on_Alternative_Minimum_Tax

The editor is suggesting that the NY Times not a "truly reliable source" on the topic and has previously excised any references to the NY Times topic on the Alternative Minimum Tax. Before he engages in an edit war, I've asked him to seek guidance on the Reliable Sources Noticeboard. Mattnad (talk) 00:47, 4 September 2009 (UTC)

There has ensued an extended discussion at Wikipedia:Reliable_sources/Noticeboard#New_York_Times_Article_on_Alternative_Minimum_Tax, in which several others have chipped in with further information. For those interested in whether and to what extent the NY Times is a reliable source, please see that page. There is also significant other information about AMT, though. I don't want to copy it over so let's consider it incorporated on this page by reference. I'll make some changes on the AMT article page to reflect that discussion. PMcGarrigle (talk) 22:34, 4 September 2009 (UTC)

The problem with any newspaper source, including venerable institutions like the Times, is sometimes the pieces published are opinions of the writer, unsubstantiated by any facts. Opinions are not "reliable" by Wiki standards unless they are opinions of experts. If an esteemed scientist reports in Science that something is a particular way, it is reasonable for us to quote it as authoritative. By contrast, when a reporter with a strong political agenda states, "A law for untaxed rich investors was refocused on families who own their homes in high tax states", it is NOT reasonable for us to quote it. The latter statement is not reflected in the legislative history of AMT, and indeed was not even an effect of AMT when it was passed.

Wikipedia has no business lobbying for particular agendas, whether they relate to tax, environment, free speech, or Jim Bob's company. We cannot maintain NPOV is we allow articles to be soapboxes.

Since the history and controversy sections seem to be under dispute, I will flag them as such. As a long time tax professional, I certainly dispute some of the claims.

In addition, I will attempt to enhance the technical quality of the article, including generalizing it a bit for corporate AMT.

Comments welcome, and significant changes will be posted in this discussion first.Oldtaxguy (talk) 13:19, 23 April 2010 (UTC)

This is an old discussion that was resolved and there is no need IMHO to bring it up again under the presumption that it's still in dispute. The concerns of PMcGarrigle were discussed at length at the reliable sources noticeboard and it was eventually agreed to go to the original article rather the the NY Times tax topic section.

I will add that the quoted author, David Cay Johnston is a Pulitzer Prize winning reporter on tax matters who has published several books on this topic. With all due respect to your profession, Wikipedia is built upon reliable sources and not the personal opinions of its editors. It's not a stretch to believe he's a reliable source worthy of inclusion even if you personally think he's wrong.

As an aside, I would be interested in understanding whether you feel, in your professional opinion, that the AMT now (as opposed to the the original 1969 law) does not make it more difficult or impossible (depending on circumstance) to deduct expenses related to local taxes, home ownership, and children?Mattnad (talk) 14:31, 23 April 2010 (UTC)

I hereby withdraw my offer to assist in enhancing this article.Oldtaxguy (talk) 12:16, 24 April 2010 (UTC)

Nonworking & lobbyist links should be removed. Article needs work

I'm hesitant to remove things from this apparently highly controversial article. The changes by others seem to get undone. References 7 & 8 are merely commercial website links (they sell services). References 10, 33, 35 don't work. References 18, 27, 28, 32 are lobbying groups. Note that material is cited from each of these, and in each case as support for POV.

This article has numerous misleading or inaccurate statements. The headings seem random tidbits, and some don't even relate to the paragraphs headed. This really needs someone with subject matter expertise to rework it.Sfcardwell (talk) 03:56, 15 May 2010 (UTC)

My view on something as complex as the AMT (both in terms of the politics and the technicalities around pros and cons) will have a wide variety of opinions. I'm not all all concerned about including points of view provided we have balance. As for comments that some of the references are lobbying groups, 18 is an article from Salon Magazine and a couple of others are from the Cato institute which is a think tank. Is the cato institute a right wing organization? Yes. Do we remove their comments because of that? No. (in my view). WP:NPOV does not encourage removing cited material just because that has a POV.

What I have seen in more effort from people to remove particular opinions that they personally disagree with (for a variety of reasons) that would have skewed the article in one direction or another. I've also seen some efforts to discard content if it's not of a highly technical nature (e.g. written by accountants for accountants). But I do think you are right that it's a bit of hodgepodge in structure and can use some help. Mattnad (talk) 11:44, 15 May 2010 (UTC)

Still Unclear

I'm sorry, but this article is still extremely hard to follow. I came here to, basically, find out what AMT is, and at what income it is effective, and I have to say, with respect to this basic information, the article is a clear FAIL. Could somebody put somewhere near the beginning just a clear explanation of what it is, and then put all the details later? 128.156.10.80 (talk) 15:10, 15 July 2010 (UTC)

It is very technical and i agree with you. I've updated the intro to make it a bit more approachable up front. As what income it hits, that's impossible to pin down since it varies depending on AGI and the types and value of itemized deductions. That's one of the major issue with the AMT in that it's difficult to plan for and can surprise people.Mattnad (talk) 18:55, 15 July 2010 (UTC)

New section added: AMT Details

I have added a new section AMT details replacing portions of the old Structure section with significantly expanded explanations and references. The diagram was moved up to the history section (since it compares rates in 2001 and 2004). I moved the table of exemption amounts to history also, added AMT rates and expanded columns to accommodate this, and added commas for readability per Wikipedia guidelines on presenting amounts. I deleted without enhancement the subsection on phase out; even as an experienced tax pro I found the way it was written confusing. Comments and edits welcome. Oldtaxguy (talk) 21:54, 20 September 2010 (UTC)

Reverting changes to citations

The changes made recently to citations were not entirely correct. The "Further reading" section has and should have only one capital letter. Willis|Hoffman is how the publisher cites the book, not Willis & Hoffman. The use of the date for the citations is important, as the volumes cited change each year.

It would be better to fix minor problems you saw with my corrections (and thus make incremental corrections) than to revert. Try to do that in the future, it's usually more productive this way and leads to better articles. If you compare my most recent edit with my original one, you'll see what I mean. There were obvious problems with citations, as well with ambiguous references to "below" which actually appears "above" (and vice-versa) in the way article renders, which I tried to fix in my original correction. With respect to Willis|Hoffman vs Willis&Hoffman, it's usually better to adhere to a common style when making citations (at least within the same article). Also your argument about publisher's self-citation doesn't hold any water - they could put "|" for a number of different reasons, including the typographical style, this is not a good reason in itself to follow their choice of substitute character for "&". Also consider what if they chose to self-cite Willis&Hoffman as e.g. "The Best Book in the World" -- would you still stick to the publisher's convention? Now, if you really want to be constructive in your edits, try looking up the missing page in Willis&Hoffman and put it in the text of the article, since you obviously have access to the book.cherkash (talk) 18:34, 12 November 2010 (UTC)

Removing paragraphs inserted as apparent student exercise

I have removed two paragraphs that were fully redundant with other discussions in the section. The editor is listed as a student with a project on this article. Oldtaxguy (talk) 04:10, 1 December 2010 (UTC)

I agree that some of the content was repetitive and I invite others to change/edit/discuss it, but the paragraphs were added to help explain in simple terms how the AMT works. This article is flagged as possibly being "too academically written" and many folks who come here to read about the AMT are probably not well versed in financial language. Several posts on this discussion page have mentioned that problem as well. I would prefer to discuss how we could make the article more user friendly rather than simply deleting content without attempting any dialogue at all with the editor. —Preceding unsigned comment added by Srayburn (talk • contribs) 00:19, 2 December 2010 (UTC)

Revert incorrect statement

While the PRACTICAL effect of the AMT credit for regular tax for corporate taxpayers may in some cases be that deferral items result in the credit when they reverse, the law does not actually state that. Further, for individual taxpayers, most AMT is caused by permanent differences (e.g. state income tax) and the closeness of regular and AMT rates. The credit is NOT limited to regular tax generated by deferral items. See [ 26 USC 53]: credit is the excess of the net minimum tax in prior years less prior credits, limited to the excess of the regular tax after most credits over the tentative minimum tax. If TurboTax makes the alledged statement, then it is incorrect. I have reversed the change. Oldtaxguy (talk) 05:40, 19 January 2011 (UTC)

You are not correct, Oldtaxguy. I was also confused first time I read the law, and initially thought it was a widely-believed mistake that only deferral items are allowed. Not so. Please pay attention to the details: credit is the excess of adjusted net minimum tax, defined further down in section 53(d)(1)(B)(i). So TurboTax and many other tax commentators are correct in this respect. I'm going to revert back the change you made. cherkash (talk) 02:35, 22 January 2011 (UTC)

I believe I am correct, but was not thoroughly comprehensive (which would have added a lot of text). The credit is limited with respect to individuals (but not for corporations) to the net minimum tax reduced by the amount the net minimum tax would have been if only the items in sections 56(b)(1) and 57(a)(1), (5), and (7). Section 56(b)(1) relates to certain itemized deductions of individuals as well as the deduction for personal exemption. Most, but not all, of these are inherently "permanent" items (like 2nd home interest and state taxes). HOWEVER, these often can, with good planning (which I have done for clients), be deferred into a a non-AMT year. The relevant section 57 items are all three inherently permanent. However, there are numerous permanent items that are allowed in computing the credit. These permanent include, for example, permanent basis differences in computing depreciation, time-barred NOLs (not as applicable now as in the past), the impact of the alcohol fuel credit adjustment, the IDC 65% limit, denial of tax shelter farm losses (which is an individual only adjustment), the insolvency exception to loss denials, and differences in foreign tax credit for regular vs. AMT that have the effect of preventing the credit for one but not the other.

Thus, the statement that the AMT credit applies only as AMT relates to deferral items is completely false for corporations, and partly false in some circumstances for individuals. The statement should be heavily qualified or removed. A much better solution would be to explain briefly the impact of individual itemized deductions on the credit.

I will await (for a while) your future changes. Oldtaxguy (talk) 16:13, 22 January 2011 (UTC)

The reason I reverted your revert was that in the original form the statements about AMT credit were very misleading: they made it look like any year your AMT exceeds your regular tax will make you eligible for the credit in the future, which is obviously not the case. Hence, it's better to make incremental improvements rather than simply revert (like you did).

So since you seem to know the details of the issue better than I do, I suggest you go ahead and expand the "AMT credit against regular tax" section. (In my last edit I tried to localize to that section all the references to the AMT credit in the article.) I would also suggest you scan "AMT basics" section to make sure there are no erroneous statements there with respect to AMT credit. cherkash (talk) 23:36, 22 January 2011 (UTC)

I think my edit to the credit section addresses your concerns. Please check. Oldtaxguy (talk) 18:59, 4 February 2011 (UTC)

I actually hoped you would do better than simple re-phrasing. I think being comprehensive would not be bad, along the lines you wrote in your comment above. We could definitely live with your current edit, but given the knowledge you have on the subject, it'd help to add more details. cherkash (talk) 07:22, 5 February 2011 (UTC)

Changes to Growth of AMT section

I modified the Growth section to remove speculation, statements unsupported by their sources, and incorrect statements. The references to 2009 and 2010 were projections based on assumptions about what the law and economy would be. 2008 is latest actual data, which I have cited (it was released in December 2010). The purported statement by the CBO director was incorrectly quoted. His actual statement included much more than AMT. I added additional info from IRS SOI (cited). Finally, I removed an external link to advertising. Oldtaxguy (talk) 18:54, 4 February 2011 (UTC)

Unencyclopedic section: How to avoid...

I flagged this section as in violation of Wikipedia policy WP:NOTHOWTO . Oldtaxguy (talk) 05:01, 5 February 2011 (UTC)

Too technical?

I noticed the technical tag has been here since 2007. I reworded the lead paragraph so it contains a simple explanation of what AMT is. Please review and improve if you can. Is it now clear enought to remove the technical tag? Guy Macon 10:42, 6 February 2011 (UTC)

No apparent objections, and it seems to me that it is improvd enough to justify tag removal, so I am removing it now Guy Macon 15:43, 8 February 2011 (UTC)

I will rework the lead paragraph again. The revised paragraphs make statements that may imply that itemized deductions are somehow available for corporations, and incorporate items that are opinions. Please note that a 48 hour comment period is rarely enough for other editors to respond. Oldtaxguy (talk) 22:01, 8 February 2011 (UTC)

I've re-instated the technical tag. After the round-about of corrections by both of you, the article looks almost identical to where we started.

I actually liked the way Guy Macon re-worked the intro, but since Oldtaxguy raised some objections to opinions that have been introduced (which ones?), could you take another attempt at re-working it? I suggest that if Oldtaxguy clearly states what's objectionable in the Guy's version, we may be able to shape it better. cherkash (talk) 00:46, 10 February 2011 (UTC)

I would encourage someone with some minimal amount of expertise (I have none in this area) to try to make the lead paragraph more understandable. Keep in mind that the lead is supposed to be a plain English definition for the reader who comes to the page wondering what an alternative minimum tax is. Details such as income levels and tax rates should be moved to a second paragraph. Wikipedia:Make technical articles understandable gives us some excellent guidelines on this.

Alas, we can't just leave a page tagged as being too technical / too hard to understand forever. This is currently the oldest listing in Category:Wikipedia articles that are too technical. Articles that fail to meet Wikipedia understandability standards need to be improved until they do meet Wikipedia standards or deleted if no such improvement is possible. Guy Macon 03:09, 10 February 2011 (UTC)

I made only 5 changes to Guy's intro:

• Deleted opinion statement: Because the AMT was never indexed to inflation, the number of taxpayers who must pay the AMT grows larger every year.
• Deleted old history that bears no resemblance to current law: The AMT was first imposed in 1969 in response to 155 people with very high incomes who claimed enough legitimate deductions and other tax breaks to reduce their federal income taxes to zero.
• Added sentence for context for general user, indicating general familiarity needed to understand the article: It is imposed as part of United States income tax.
• eliminate a paragraph break he introduced.
• reduce a few words to "It is"

I suggest you consider the guideline Guy points out: Wikipedia:Make technical articles understandable. That article suggests the following, which have been incorporated:

• Ideas for enhanced understandability: make clear what prerequisites they will have to master before they can understand it. -->To this end, I added the context setting sentence.
• Rules of thumb: It's perfectly fine for later sections to be highly technical, if necessary. Those who are not interested in details will simply stop reading at some point, which is why the material they are interested in needs to come first. -->To this end, we some time ago put tax rates and exemptions in the intro. See prior discussions of the utility of such information to the average reader.
• Rules of thumb: Use jargon and acronyms judiciously. -->I believe there is only two bits of jargon in the intro: personal exemptions and itemized deductions. I believe anyone reading the article due to other than idle curiosity is likely to know what these mean from their own tax return (because they likely would not be interested in AMT if they did not have these).

Note that the technical tag dates from a few hundred edits back. The article in 2007 was very dissimilar to the present article.

If you have other concerns, believe other jargon is used in the intro, can't understand particular sentences, etc., please indicate what, and I will attempt to reword. — Preceding unsigned comment added by Oldtaxguy (talk • contribs) 04:10, 10 February 2011 (UTC)

I've further re-worked the introduction. Please check if it is more understandable now. cherkash (talk) 08:53, 12 February 2011 (UTC)

Much improved. Good work! Further suggestions:

Instead of:

"AMT is computed at 26% or 28% for individuals and 20% for corporations on taxable income as adjusted for AMT"

How about

"The basic rate under the AMT is 26% or 28% of income for individuals and 20% of income for corporations on taxable income, minus any non-taxable income, also known as exemptions or deductions.

I am trying to get away from phrases such as "is computed at" and "as adjusted for." Guy Macon 13:04, 12 February 2011 (UTC)

Cherkash's rewrite looks pretty good to me. I have a problem using "taxable income" without saying "adjusted", as all the action in AMT is the adjustments. I'm sorry you don't like the concepts, but they are what they are. Oldtaxguy (talk) 22:03, 13 February 2011 (UTC)

It looks good to me as well, but of course further improvements are worth discussing. It isn't the inclusion of the word adjusted that I dislike. It is the phrase "income as adjusted for." What bothers me is that "AMT is computed at 26%" and "income as adjusted for" tend to lead the reader to jump forward to find out what kind of computations and adjustments are being talked about, then to jump back into the sentence. Alternatives such as "The AMT is 26%" and "adjusted taxable income" do not tend to lead the reader to jump forward. It is OK to over-simplify the lead paragraph and put he details in paragraph two as long as the lead has missing info and not wrong info. There is no reason why the lead paragraph cannot be written so as to be easily understood by a child in elementary school writing a paper on taxes. If that means that an adult doing his taxes has to read paragraph two as well as one to get he whole picture, that's OK too. Guy Macon 17:00, 15 February 2011 (UTC)

Please see Wikipedia:Make technical articles understandable, which states

Don't sacrifice accuracy

Do not "dumb-down" the article in order to make it more understandable. Understandability is intended to be an improvement to the article for the benefit of the less-knowledgeable readers (who may be the largest audience), without reducing the value to more technical readers.

Also, for kids, see Simple, a version of Wikipedia aimed at younger readers.

If you believe a simple version of this topic is warranted, perhaps you could write an article "Introduction to AMT", in a vein similar to the "Introduction to xxx" articles in several science and math topics. Oldtaxguy (talk) 01:47, 16 February 2011 (UTC)

Cherkash's rewrite seems quite clear, and there is no consensus for further simplification, so I am removing the technical tag. Good work, everybody! Guy Macon 17:10, 17 February 2011 (UTC)

Merge etc from AMT and stock options

I believe the entire article that these parts are taken from is WP:UNDUE. I retained it only because of WP policy on not deleting material. Addition of this material to AMT burdens the article with a level of detail, and an increase in the opinion section, that is unnecessary. I think a single sentense is appropriate, with a reference to the article on options. Comments? If no objections, I'll revert or modify as time permits. Oldtaxguy (talk) 01:57, 15 March 2011 (UTC)

Content-wise, I like this new subsection. I can see your point about increasing article a little, but this material reads well and is easy to understand. So overall it gives a good exposition of this (sub)topic. I'd say let's keep it (after making sure the claims are verifiable – specifically the one about comparative size of tax due vs. credit that is eventually received). cherkash (talk) 05:20, 18 March 2011 (UTC)

Lead is far too complicated

The lead of this article is far too complicated and detailed, with too many undefined technical terms. Someone who is unfamiliar with the AMT would have no idea what it is from reading the lead, apart from the fact that it is a form of taxation in the US. The lead should simply introduce the concept, when/how/to whom the tax is applied, and possibly a brief discussion on what repercussions it has had. The reader has absolutely no need to know that the 2010 exemption is "$72,450 for married couples filing jointly or a qualified widower, $36,225 for married individuals filing separately, $47,450 for single individuals, and $40,000 for corporations...", especially when the term "exemption" is not defined or linked to another article, so the reader has no idea what that even means. Also, the first two sentences are entirely redundant. I'll try to do some work on the lead, but I'm not familiar enough with the AMT to completely rewrite it. I've added the {{Lead rewrite}} template to the article. —SW— ^express 16:30, 19 July 2011 (UTC)

I tried my best to fix it. Let me know if you disagree with my changes. —SW— ^confer 18:39, 19 July 2011 (UTC)

I disagree with your changes. AMT is inherently complex (see prior discussions). The introduction needs to have key aspects of the topic as well as a brief summary. The goal of the pre-change version, hammered out with several editors participating, was to provide the details many readers would want to know first. The exemptions are HIGHLY relevant to most readers, as they indicate whether the AMT even applies to the reader. Perhaps a better approach would be to expand the word "exemption" to "threshold for application (exemption)". I think most U.S. adults who have filed tax returns have a basic gut level (not necessarily precise) feeling for what "exemption" means. Suggest you restore the significant deleted materials and edit, not delete. Oldtaxguy (talk) 21:56, 19 July 2011 (UTC)

Chiming in here, the exemption is essential to what the AMT stands for since it's part of the picture of whom the tax applies to. How can you explain a tax if you cannot state what it taxes? Maybe we should have more parenthetical explanations of some technical terms for the complete newbie to taxes, but I agree with Oldtaxguy that we shouldn't cut too deep.Mattnad (talk) 23:28, 19 July 2011 (UTC)

I agree that exemptions are relevant to most readers, I disagree that such a level of detail is required in the lead. For instance, for a thorough understanding of special relativity, you need to understand that special relativity uses a flat 4-dimensional Minkowski space, but you won't find that information in the lead. Per WP:MOSINTRO: "Consideration should be given to creating interest in reading the whole article. This allows editors to avoid lengthy paragraphs and over-specific descriptions, because the reader will know that greater detail is saved for the body of the article. In general, specialized terminology and symbols should be avoided in an introduction... Where uncommon terms are essential to describing the subject, they should be placed in context, briefly defined, and linked... Readers should not be dropped into the middle of the subject from the first word; they should be eased into it." Just because the article is about taxation doesn't mean that it has to read like IRS instructions. Various sentences in the original lead make no sense to me, like these: "AMT is computed at 26% or 28% for individuals and 20% for corporations on taxable income as adjusted for AMT. Taxpayers are allowed a flat exemption amount but not personal exemptions or the standard deduction... Individuals may not deduct taxes or miscellaneous itemized deductions, depreciation deductions are computed using longer lives and slower methods, and other adjustments apply. The AMT rate for capital gains and qualified dividends currently is the same as the regular tax rate for such items. A foreign tax credit and eight other business credits are allowed to reduce AMT. Taxpayers who do not owe AMT need not file the AMT forms." I do my own taxes, and all of those sentences are meaningless to me. The definition of AMT given is self-referential: "AMT is computed at 26% or 28%...on taxable income as adjusted for AMT." If I don't know what AMT is, then how could I possibly understand how to "adjust for AMT". Also keep in mind that Wikipedia is not a manual on how to do your taxes.

In any case, I hear your concerns and I'll try to introduce some more detail in the lead in an accessible way if I get a chance today. —SW— ^confer 17:31, 20 July 2011 (UTC)

Incorrect fact

The line "each taxpayer must pay the greater of AMT or regular tax" is wrong, you add AMT to regular tax then subtract your credits. Daniel Christensen (talk) 22:36, 5 August 2011 (UTC)

The statement is substantively correct: the taxpyer owes the higher of TMT less credits or regular tax less credits. The statement is made in an introductory paragraph on the basics of the AMT. Getting to the fine legal point of difference between TMT and AMT requires a lengthy technical addition to the article. If you have a simple way of stating this, please do so. Keep in mind that little about any WP article on tax is precise. The articles attempt to explain; they're not treatises. Oldtaxguy (talk) 23:39, 5 August 2011 (UTC)

Upper middle class?

"Those that do get caught by the AMT are typically upper middle class persons making approximately $200k-$500k." No source is given for the claim that that income range is "upper middle class", and that range of incomes is roughly in the top 2% of incomes according to http://en.wikipedia.org/wiki/Social_class_in_the_United_States#Income Most references I find from a quick search peg USA upper middle class at a rough range of $90k-$200k or so. 68.59.185.53 (talk) 21:59, 29 August 2011 (UTC)

I agree with this. Can you provide those references. 0¹⁸ (talk) 23:02, 29 August 2011 (UTC)

AMT basics table needs 2011 rates added

AMT basics table lacks 2011 rates, exemption limit, exemption phase-out, etc.

Are those available? If so, very salient to add in.

Ocdnctx (talk) 20:31, 21 December 2011 (UTC)

Capitalization of article name

Since Wikipedia style is not to capitalize the words in an article name (after the first word), except when they would otherwise be capitalized anyway, I don't see why the article is named Alternative Minimum Tax rather than Alternative minimum tax. John M Baker (talk) 18:02, 24 January 2012 (UTC)

AMT basics - IRC Sect. 55(e)

I propose the following sentence under "AMT basics" be changed as indicated below for conformity with IRC Sect. 55(e):

Original: In addition, corporations with average annual gross receipts less than $7,500,000 for the prior three years are exempt from AMT, but only so long as they continue to meet this test.[3]

Revised: In addition, corporations with average annual gross receipts of $7,500,000 or less for the prior three years are exempt from AMT, but only so long as they continue to meet this test.[3] — Preceding unsigned comment added by TaxNerdLove (talk • contribs) 00:09, 6 October 2012 (UTC)

removing POV tag with no active discussion per Template:POV

I've removed an old neutrality tag from this page that appears to have no active discussion per the instructions at Template:POV:

This template is not meant to be a permanent resident on any article. Remove this template whenever:

1. There is consensus on the talkpage or the NPOV Noticeboard that the issue has been resolved
2. It is not clear what the neutrality issue is, and no satisfactory explanation has been given
3. In the absence of any discussion, or if the discussion has become dormant.

Since there's no evidence of ongoing discussion, I'm removing the tag for now. If discussion is continuing and I've failed to see it, however, please feel free to restore the template and continue to address the issues. Thanks to everybody working on this one! -- Khazar2 (talk) 00:03, 30 June 2013 (UTC)

Now don't go and me all reasonable on us here. What's the point of having a tax topic if it doesn't lead to complaints from one side or another ; Mattnad (talk) 18:16, 30 June 2013 (UTC)

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Updated for Impact of TCJA in 2018

I was surprised to see that the AMT wiki article still hasn’t been updated for the TCJA impact, a year later. But really, I shouldn’t be surprised – as of Dec 6, 2018, the IRS still hasn’t updated its “Instructions for Form 6251” [3] for the Personal AMT. There are quite a few outdated websites still up.

Also, I think the AMT wiki-page hadn’t been significantly updated since 2013.

I have tried to update the article appropriately to show the TCJA impact, with three caveats: I am not really a subject-matter expert. I prepare taxes, and I can and have done research on the TCJA impact on the AMT. I have tried to source everything clearly, back to authoritative/original sources where at all possible. But this should be scrutinized well by people who know this information maybe better than I do.

Secondly, I have not deleted anything. I think a fair bit of the old information is no longer relevant now, except possibly to historians. (Note the detailed information for 2009-2013.) But I will leave the deletion, as well as the fact-checking, to people who have deep knowledge of the subject.

Thirdly, I’m not a highly skilled Wikipedia editor. I’m making all of the changes manually in wikitext markup language, largely trying to copy existing styles. There may be Wikipedia conventions I’m not aware of. It’s likely I’m making manual errors as well. — Preceding unsigned comment added by Magnabonzo (talk • contribs) 18:06, 6 December 2018 (UTC)

Sources for 2018 update of "AMT basics" table are as follows:

• https://www.irs.gov/pub/irs-pdf/f6251.pdf -- the 2018 Form 6251 for AMT-Individuals. The 2018 Instructions for Form 6251 have not yet been released, as of December 6, 2018.

• According to https://www.thetaxadviser.com/issues/2018/may/income-taxation-trusts-estates-tax-reform.html, “The law did not amend the AMT for trusts and estates. The exemption of $24,600 and phaseout threshold of $82,050 for trusts and estates (for 2018) were not changed.” https://www.irs.gov/pub/irs-pdf/i1041si.pdf is the 2017 Instructions for Trust (Form 1041) Schedule I, Alternative Minimum Tax – Estates and Trusts.

• http://www.bowlesrice.com/tax-cuts-and-jobs-act-2018-changes-Alternative-Minimum.html Magnabonzo (talk) 18:15, 6 December 2018 (UTC)

Indexing for inflation

Hello, I massaged the Intro, also the start of Section 1.

The Intro says that the 2012 law indexed the AMT's figures for inflation. It makes the same statement about the 2017 law. I've been editing Capital gains tax in the United States and know that one of the "cost-limiting" innovations in the 2017 law is to index inflation using the United States Chained Consumer Price Index, which doesn't rise as quickly as the regular Price Index. I know they did this for ordinary income tax rates and capital-gains rates, and suspect they did likewise for the AMT. So while it is true that the 2017 law indexed the AMT for inflation, what really happened in 2017 was a deceleration of the indexing! Am I right? Spike-from-NH (talk) 04:40, 15 December 2018 (UTC)

Example math doesn't add up and is opaque

> Alice calculates $15,246 in ordinary federal income taxes on $100,000: $100,000 - $12,200 standard deduction = $79,800 taxable income, at ordinary rates of 10%, 12%, 22%, 24%, would pay $15,246.50 in taxes.

100,000 - 12,200 = 87,800, not 79,800.

The "ordinary rates" of "10%, 12%, 22%, 24%" does not specify which rates apply to which brackets. I think it would be helpful to simplify, perhaps to a single tax rate, or at least to explain how $15,246.50 is derived. — Preceding unsigned comment added by Razziabuissa (talk • contribs) 06:39, 16 March 2020 (UTC)