Changing the Alternative Minimum Tax Structure

Refer to the article, "Revenue and Tax Policy Brief: Alternative Minimum Tax," which you read in this week's study. In his revenue and tax policy brief, Roberton Williams of the Congressional Budget Office concludes that over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow (Williams, 2007, p. 8). In the article, under the heading, "Changing the AMT," review the four solutions the author proposes.

Please respond to the following:

• Select the solution that you believe would be in the best interests of both the taxpayers and the IRS. Provide a convincing argument in favor of your chosen solution's enactment into law.