AMT
This was a form of taxed that was put in place by congress to counter the rich business people who were running away from paying taxes. MT (Alternative Minimum Tax) can also be said to be the tax that coincides with the regular tax but on it there re items that are added that are not taxed. This tax however got some loopholes as some middle class people started being faced by it since it was not updated(Harold, 2005).It is worth noting that AMT came into being because to the political reasons of wealthy people not paying taxes and running away from their obligations.
Where AMT applies
This unique form of tax applies to people that have a good pay. It is also paid by the big corporations that are in business and making good money. MT makes sure that firms and business people that enjoy deductions at least pay some minimum tax as per the AMT guidelines. It should be noted that individuals pay the AMT if their tax of AMT is bigger than the traditional amount of tax (Andrew, 2010).The good thing is that the AMT does not allow standardized deductions.
Stealth taxation
The AMT qualifies as stealth tax since it is not noticed. Only small amounts are paid from the amount that is earned by an individual or a business organization. The tax also came due to political reasons and not sincerity from law makers. MT tax is necessary because it tries to seal the loopholes that exist and are exploited by business people and well performing organizations. It should remain to try and counter the business people that run away and perform their businesses in the panama.
References
Harold, S (2005).The Alternative Minimum Tax .Florida: Sphinx Publishers.
Andrewl, L (2010). Cracking the Code. Making Sence of the Corporate Alternative Minimum Tax. Washington: Brookings Institution’s Press.
