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A Growing Problem
According to a March, 2005 presentation made to the President's Advisory Panel on Tax Reform by Leonard E. Burman, Senior Fellow at the Urban Institute and Co-Director of the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, by 2010 the Alternative Minimum Tax will affect 30 million taxpayers, including virtually all the upper-middle-class families with two or more children
Under current law, about 2.4 million taxpayers (1.8%) were subject to AMT in 2003. That figure should more than double in 2005 to nearly 4% of all taxpayers. With the roll back of AMT exemption in 2006 the figure jumps to 20% of taxpayers.
AMT Projections
by Individual Characteristics
AMT Participation Rate (percentage)
| Characteristic | 2005 | 2006 | 2010 |
| Percent of Taxpayers | 3.8 | 20.4 | 30.4 |
| Percent of Tax Filers | 2.7 | 14.6 | 22.6 |
| by Filing Status Single Married Filing Joint Head of Household Married Filing Separate |
0.8 5.2 0.8 5.9 |
1.6 30.7 4.2 29.0 |
2.9 47.9 7.9 45.9 |
By Income
| Cash Income | Current Law |
| (in thousands) | 2005 | 2006 | 2010 |
| Less than 30 30-50 50-75 75-100 100-200 200-500 500-1,000 1,000 and more |
0.0 0.1 0.5 0.8 6.8 53.4 39.3 26.7 |
0.0 1.1 6.0 31.8 63.0 87.0 51.8 33.4 |
0.0 2.9 16.9 53.4 81.0 93.9 62.6 35.3 |
Source: Urban-Brookings Tax Policy Center Microsimulation Model, 2005.
Copyright © 2007 David M. Britton. All rights reserved.