Trump-O-Meter

Repeal the alternative minimum tax

"The 3.8 percent Obamacare tax on investment income will be repealed, as will the alternative minimum tax."


Updates

Eliminating the alternative minimum tax is still the plan

The alternative minimum tax is a way of calculating income taxes that ensures that every American pays at least a minimum amount, even if they have a lot of deductions that significantly reduce their tax bill.

President Donald Trump included elimination of the alternative minimum tax as one of the bullet points in a one-page summary of principles released on April 26 for his upcoming tax legislation.

Now, with the release of its fiscal 2018 budget proposal on May 23, the administration once again pledged to pursue this goal.

Specifically, the budget proposal said that Trump would "end the burdensome alternative minimum tax, which requires many taxpayers to calculate their taxes twice."

The AMT was projected to bring in about $35 billion in 2017, according to the Urban Institute-Brookings Institution Tax Policy Center. That's about 2.2 percent of all individual income tax revenue.

The alternative minimum tax is also one that could have a significant impact on Trump personally, if one of his past tax returns is any indication. A line in Trump's leaked 2005 tax return shows that he paid $31.3 million that year under the alternative minimum tax. That was a large portion of his total tax bill: Had it not been for the AMT, Trump would have owed only about $5.3 million in federal taxes that year.

There is no actual tax legislation yet to carry out Trump's priorities, and Congress will have to pass measures before Trump can sign them into law. Still, his reiteration of his intent to eliminate the alternative minimum tax in both the one-page summary and in the budget proposal moves this promise to In the Works.

Sources:

White House, one-page summary of tax proposals, April 26, 2017

White House, fiscal 2018 budget proposal, May 23, 2017

PolitiFact, "Nancy Pelosi on target about what Donald Trump might save under his tax plan," April 28, 2017

Email interview with Roberton Williams, fellow at the Urban Institute-Brookings Institution Tax Policy Center, May 24, 2017