The Alternative Minimum Tax (AMT) is like a completely separate tax system in which many deductions and exemptions are not allowed. Taxpayers subject to the ATM must calculate their tax liability under both the normal tax system and the AMT, paying whichever yields a higher amount. Congressional Republicans have been pushing to abolish the AMT for individuals. Last year, Congress passed repeal legislation, but it was vetoed by President Clinton, who would merely revise the ATM to reduce its impact.

The problem is that the AMT exempt amounts have been fixed since 1986, whereas many provisions of the normal income tax, such as the personal exemption, have been indexed to inflation. More and more taxpayers are finding that their tax liability under the AMT is higher than under the normal income tax.

• Thus Congress's Joint Committee on Taxation (JCT) estimates that the number of taxpayers forced to pay AMT has risen from 140,000 in 1987 to 823,000 last year.

• This figure expected to rise more than ten times over the next decade, to more than 9 million, unless action is taken now (see figure).

In a recent report for FY 1999 from the National Taxpayer Advocate of the Internal Revenue Service, Advocate W. Val Oveson called for complete elimination of the AMT for individuals.

The original intent of the AMT was to ensure that all taxpayers paid some tax. Yet since then, the number of those completely exempted from taxation by the Earned Income Tax Credit has grown to more than 35 percent of all tax filers, according to the JCT. If the principle of the AMT is valid, it should apply to everyone. Otherwise it should be eliminated.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, January 31, 2000.

For text http://www.ncpa.org/oped/bartlett.html