The Alternative Minimum Tax and Effective Marginal Tax Rates

Daniel Feenberg () and James Poterba

No 10072, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the impact of the Alternative Minimum Tax on the weighted average marginal tax rates that apply to various components of taxable income. It also considers the impact of several AMT reform proposals on the number of AMT taxpayers, the total revenue collected from the AMT, and the weighted average marginal tax rates that apply to wages, capital income, and deductions such as state and local taxes and charitable gifts. The paper uses the NBER TAXSIM model to project federal personal income tax liabilities as well as AMT liabilities between 2003 and 2013. The AMT has only a modest impact on the average marginal tax rates for most sources of income because some AMT taxpayers face higher marginal tax rates, and others lower tax rates, as a result of the tax. The projections show that modest increases in the AMT exclusion level have substantial effects on the number of AMT taxpayers, and that indexing the AMT parameters would reduce the number of AMT payers in 2010 by more than sixty percent. These changes would also reduce the AMT's impact on average marginal tax rates.

JEL-codes: H24 H62 (search for similar items in EconPapers)
Date: 2003-11
New Economics Papers: this item is included in nep-pbe
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Feenberg, Daniel R. and James M. Poterba. "The Alternative Minimum Tax And Effective Marginal Tax Rates," National Tax Journal, 2004, v57(2,Jun), 407-427.

Downloads: (external link)
http://www.nber.org/papers/w10072.pdf (application/pdf)

Related works:
Journal Article: The Alternative Minimum Tax and Effective Marginal Tax Rates (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10072

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10072

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().