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Ireland's regular tax rate is 12.5percentt, and E.U. rules state that members can't give special benefits to individual companies — even the most highly valued company in the world.
Since the top rate of the AMT is 28% and the top regular tax rate is 35%, paying the AMT is preferable to simply not taking deductions and paying the regular tax.
"When you lower the regular tax rate, it means that more people are going to be in the alternative minimum tax, so they're not going to get the benefit of the tax cut," says Bernie Kent Bernie Kent, a CPA with PricewaterhouseCoopers.
Along with Reagan's 1981 cut in the top regular tax rate on unearned income, he reduced the maximum capital gains rate to only 20%.
If so, the opposite approach may make more sense -- bill immediately to receive the income in 2011, so "your income will be taxed at no more than 28percentt under the AMT vs. a regular tax rate of up to 35percentt," Weltman says.
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For a regular, deductible I.R.A., distributions to retirees are taxable at their regular tax rates.
It snares more people as the gap narrows between regular tax rates, which are falling, and A.M.T. rates, which are not.
It is morally indefensible because it asserts that the efforts and risks of private equity partners are worthier than those of workers who pay regular tax rates.
Subjecting Social Security to regular tax rates would, without harming those in need, produce billions annually, enough to fund catastrophic health and nursing care.
Despite cuts in regular tax rates in 2001 and 2003, the A.M.T. rates remained unchanged, so the gap between the regular rates and the alternative minimum rates has narrowed.
Second, it reduced regular tax rates, without lowering the rates in the AMT or indexing the AMT tax brackets for inflation, as regular tax brackets are indexed.
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Justyna Jupowicz-Kozak
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