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current form through three pieces of legislation; namely, the
Revenue Act of 1978 (1978 Act), Pub. L. 95-600, 92 Stat. 2763;
the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA),
Pub. L. 97-248, 96 Stat. 324; and the 1986 Act.
Through the 1969 Act, Congress enacted the MT provisions to
prevent corporate and individual taxpayers from aggregating
deductions to the point where they would pay either no tax or a
“shockingly low” tax. First Chicago Corp. v. Commissioner,
842 F.2d 180, 181 (7th Cir. 1988), affg. 88 T.C. 663 (1987).
Congress aimed through the MT provisions to allocate the tax
burden among taxpayers more equitably by taxing preference items
(preferences) consisting of certain deductions and an exclusion
from gross income. See S. Rept. 91-552, at 112 (1969), 1969-3
C.B. 423, 495. The preferential deductions generally included
deductions which involved no economic cost to the taxpayer (e.g.,
the long-term capital gains deduction) or exceeded current
economic cost. The MT equaled the product of a single tax rate
multiplied by the amount of the taxpayer’s preferences which
exceeded a prescribed deduction.
This scheme remained in effect, with only minor changes, as
the only minimum tax formulation in the Code until 1978. See
1978 Act sec. 421(a), 92 Stat. 2871. Through the 1978 Act,
Congress supplemented the MT with an AMT for noncorporate
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