Michalyshyn, Katarina; Dong, Matt

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Changes to the Alternative Minimum Tax as Proposed in Budget 2023

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Katarina Michalyshyn; Matt Dong

Published on September 7, 2023 PDF

This report estimates the impact of changes to the Alternative Minimum Tax (AMT) proposed in Budget 2023.

Some high-earning individuals and trusts have enough tax credits, deductions and other tax incentives that their income tax as a percentage of their income is lower than that of other taxpayers. The AMT aims to ensure that higher-income taxpayers pay at least a base rate of tax. Budget 2023 proposed changes to the AMT that would make the highest-income earners pay a greater proportion of the total AMT revenue.

Highlights

Budget 2023 proposed changes to the Alternative Minimum Tax (AMT).
The AMT is an alternative tax calculation meant to ensure that high-income individuals and trusts do not pay a disproportionately small amount of tax relative to their income compared with other taxpayers.
The estimated net revenue from these changes is $2.6 billion over five years.
The changes are expected to shift the tax burden to higher-income individuals. However, the same shift is not expected for trusts.

Budget Measures

Fiscal policy

Tax Evasion and Avoidance

Taxes (Other)

Taxes on income

Taxes on investment