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The AMT's Growth Was Not "Unintended": How the Administration and Congressional Leaders Anticipated the AMT Problem and Knowingly Made it Worse

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Publication Date: November 2007

Publisher(s): Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Aviva Aron-Dine

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Banking and finance (Taxation and tax policy)

Keywords: Tax code; Income diversity; Federal budget; Economic projections

Type: Report

Abstract:

Lawmakers not only anticipated the AMT’s explosive growth, they counted on it to mask the cost of the 2001 tax cuts. The Administration and congressional tax writers were well aware that the legislation they pushed in 2001 would force millions more taxpayers to pay the AMT, which would take back part or all of their tax cuts and thereby reduce the 2001 tax bill’s apparent cost. More than two thirds of the cost of this year’s AMT patch is due to actions taken by Congress and the Administration in designing the 2001 (and 2003) tax cuts.