A new alternative on the way?

The alternative minimum tax — or AMT, more popularly — has been in the news of late, and while most Americans have heard of it, not many can tell you exactly what the tax is or how it's computed.

Generally, mention of the AMT will create a sense of unease and a glazed look in the eyes.

The origins of the AMT can be traced back to 1969, when 155 taxpayers making over $200,000 had no federal income tax. This situation created outrage and members of Congress received more constituent letters on this matter than the Vietnam War. Congress's solution to the problem was an “add-on” minimum tax that applied to certain items that escaped taxation under the regular tax system.