A Simple, Progressive Replacement for the AMT

The precursor to the individual alternative minimum tax was originally an add-on tax intended to ensure that high-income people paid at least some tax. It has mor-phed and mutated over time, and now is on track to hit 23 million households in 2007, many of themmiddle- and upper-middle-income families with children. This article describes an option that would return the AMT to its original purpose. In short, the option would repeal the AMT and replace it with an add-on tax of 4 percent of adjusted gross income above $100,000 for singles and $200,000 for couples. The thresholds would be indexed for inflation after 2007. The option restores the AMT to its original purpose. The proposed add-on tax would be simple: Subtract the threshold ($100,000 or $200,000) from AG