A tax in the United States intended to be levied on very
wealthy persons who are eligible for so many
deductions that they would otherwise have little or no
tax liability. To arrive at the AMT, one adds certain deductions back into a person's
adjusted gross income and then subtracts the
AMT exemption, which results in the
alternative minimum tax income. The
taxpayer then pays a percentage of the alternative minimum tax income rather than his/her AGI. The AMT is controversial in the United States because it is not
indexed to
inflation, meaning that upper middle class families are gradually becoming subject to it, rather than only the very wealthy. See also: Tentative minimum tax,
Bracket creep.