The AMT rate has not been changed at the same times as regular income tax rates nor has it been adjusted for inflation. AMT was originally enacted to target 155 high-income households in 1969, it now affects 4 million+ families each year. As AMT has expanded, the inequalities created by the structure of the tax have become more apparent. Taxpayers are not allowed to deduct state and local taxes in calculating their AMT liability; as a result, taxpayers who live in states with high income tax rates are up to 7 times more likely to pay AMT than those who live in states with lower income tax. Also, taxpayers are not allowed to deduct personal exemptions in calculating AMT; as a result, taxpayers with large families (3 or more children) are more likely to pay AMT than smaller families.
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