Stop Adjusting the AMT for Inflation

The Alternative Minimum Tax (AMT) was initially put in place in 1970 to ensure that the richest tax payers incur a higher tax liability than the amount calculated via the regular tax code.  The original law was not indexed for inflation, so over time more and more middle-class taxpayers were required to pay the AMT.  To minimize the impact on the middle class, Congress usually passes a bill each year to adjust the AMT for inflation.  

If Congress stops manually indexing the AMT for inflation in 2010, by 2035 roughly 45 percent of the nation’s household will be subject to the AMT versus the 3% in 2010.  The Debt will still reach 100% of GDP by 2026 and 252% by 2050.