Please provide a response to the below: I found that the Alternative Minimum Tax $($AMT$)$ is seen to be a different tax within the systems of the United States in which was created by the IRS to make sure high income individuals who benefit from various tax deductions and credits, are still entitled to pay a minimum amount of income tax. The AMT was introduced in the late $1960$s due to a conference that some wealthy individuals were able to significantly reduce their tax liabilities. They did this through different legal tax planning, exploits, loopholes and taking advantage of the deductions and the credits that were already in place.

Reason for implementation:

The reason for implementing the AMT was to prevent high income individuals from using the legal tax strategies to ultimately reduce their taxes owed to extreme low levels or even sometimes zero. The idea of the AMT was to establish a minimum tax that those high income individuals would have to pay regardless of their ability to take advantage of deductions and credits.

Original Targets of the AMT:

The AMT was designed to target high income individuals with a substantial amount of credits and deductions, ensuring that they were always paying a fair share of income tax. Overtime, however, there have been changes in tax laws and changes in inflation that has caused the AMT to end up targeting a bigger range of taxpayers, including some with middle class incomes.

Calculation of the AMT:

The AMT is calculated by starting with a specific individual's taxable income, and then making some adjustments by adding back certain deductions and exclusions. Some of the common adjustments that are added back include things like state and local taxes, certain medical expenses, and other itemized deductions. After that, the taxpayer's need to subtract an exemption amount which phases out at higher incomes to get the income that the AMT rate is applied to$.$ There are two AMT tax rates: $26\%$ and $28\%($Spilker et al$.,2023).$ The taxpayer then pays the higher of the regular income tax or the calculated AMT.

Was it fair to implement the tax? Why or why not?

There are critics that argue that the AMT has not been consistent with what it should be taking in account for inflation and the changes in tax laws, which has led to the middle class taxpayers being more affected than the high income individuals. So as of right now I would say that it is not as fair as what it was at one point in time. It needs to maintain a pressure on those high income individuals to make sure they are the ones making their payments, because more times than not the middle income taxpayers are the ones not to worry about.