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Non-Tech : The Enron Scandal - Unmoderated
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To: Raymond Duray who wrote (1335)2/6/2002 2:23:21 PM
From: Zoltan!  Read Replies (1) of 3602
 
You have no idea what you're bloviating about.

What the AMT does is limit legal deductions so companies have to pay tax when they normally wouldn't have to. But it nets the same.

When will this impact most? When the economy is bad - companies that are actually in distress may have to pay taxes under AMT.

When good times return the deductions AMT prevented (they accrue) can be used. The effect has been that companies use accrued but denied under AMT deductions to pay less in good times.

So the net is the same, with one huge exception - and the reason economists are against the AMT - the AMT exacerbates the swings of the business cycle, making hard times harder, e.g., more layoffs, and good times more plush.

I believe the AMT was really aimed at one company, GE, but it hit everyone else.
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