How does the alternative minimum tax (AMT) affect high-income earners?

The alternative minimum tax (AMT) is designed to ensure that high-income earners pay at least a minimum level of tax, regardless of the deductions and credits they may receive under the regular income tax system. The AMT operates by adding back certain tax preferences and deductions that are typically allowed, thereby establishing a "minimum tax" that these individuals are required to pay.

For high-income earners, the AMT affects them by limiting the extent to which they can reduce their taxable income through various deductions and exemptions. This is particularly relevant for those who might otherwise benefit significantly from deductions due to large incomes or specific investments. By setting a minimum tax that applies to these taxpayers, the AMT prevents them from completely eliminating their tax liability, which aligns with the aim of ensuring a fairer tax system where wealthy taxpayers contribute a reasonable share of their income in taxes.

The other options do not accurately describe the impact of the AMT; it does not enhance the standard deduction or lower tax rates, nor does it allow for claiming more deductions. Instead, it effectively imposes a tax floor aimed at high-income earners.