Why Is There a Need for a Second Tax System

question 101

Essay

Why is there a need for a second tax system called the alternative minimum tax?

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Definitions:

Interest Payments

the regular payments made by a borrower to a lender, typically a percentage of the outstanding debt, as compensation for the loan or credit provided.

Deferred Gross Profit

The portion of gross profit that is not recognized in the current period due to installment sales or revenue recognition policies.

Installment Sales

The method of recognizing revenue where the payment is received over a period of time in installments, often used in real estate and high-priced consumer goods transactions.

Deduction

An expense that can be subtracted from gross income to reduce the amount of income subject to tax.