The Alternative Minimum Tax was created in 1969 to prevent 155 wealthy taxpayers from using deductions and credits to avoid paying any federal income taxes. Yet as Reason columnist and Mercatus Center economist Veronique de Rugy explains in her latest appearance on Bloomberg TV, today the tax overwhelmingly impacts non-millionaires living in just a handful of states. By separating economic myths from economic realities, de Rugy explains the facts about the Alternative Minimum Tax.


Myth 1: The Alternative Minimum Tax targets millionaires.
Fact 1: While the Alternative Minimum Tax was originally created to target millionaires, today it falls most heavily on non-millionaires.

Myth 2: The AMT is family friendly.
Fact 2: Households with three or more children are four times more likely to pay the AMT than households with zero children.

Myth 3: The Republicans are the only party strongly opposed to the AMT.
Fact 3: While Republicans would be happy to repeal the AMT, Democrats are also opposed to it. That's because almost 50 percent of AMT revenue comes from four Democratic strongholds: California, Massachusetts, New Jersey, and New York.

For additional information, see de Rugy's article "The Facts about the Alternative Minimum Tax." http://reason.com/archives/2011/06/10/the-facts-about-the-alternativ