TY  - JOUR
AU  - Feenberg,Daniel
AU  - Poterba,James
TI  - The Alternative Minimum Tax and Effective Marginal Tax Rates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10072
PY  - 2003
Y2  - November 2003
UR  - http://www.nber.org/papers/w10072
L1  - http://www.nber.org/papers/w10072.pdf
N1  - Author contact info:
Daniel R. Feenberg
National Bureau of Economic Research
1050 Massachusetts Avenue
Cambridge, MA 02138
Tel: 617/588-0343
Fax: 617/868-2742
E-Mail: feenberg@nber.org

James M. Poterba
Department of Economics
MIT, E52-350
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org
AB  - 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.
ER  -