AMT understated ~59%: amt_income carries no preference items (ISO spread, PAB interest, depletion) and the data has no such inputs

Summary

Simulated alternative minimum tax validates 59% below IRS actuals. The mechanism is structural: PE-US's amt_income is taxable_income + amt_excluded_deductions + amt_separate_addition + exemptions — the SALT-addback channel — with no AMT preference items (incentive-stock-option exercise spread, private-activity-bond interest, depletion/intangible drilling), and the dataset carries no inputs that could feed them.

Evidence

On populace_us_2024.h5 (…f0af251…20260620), vs IRS SOI TY2023 (Pub 1304 Table 1.4):

Payer counts are close (−18%) but dollars are −59%: populace finds the SALT-driven AMT filers but misses the high-dollar cases. Post-TCJA, realized AMT is dominated by ISO exercises and specialized preferences — per-filer amounts far above the SALT-addback cases. Populace's by-AGI pattern shows the shortfall concentrated in the $200k–$1M bands where ISO exercises cluster.

Nature of the fix

Two-layer: (1) policyengine_us would need preference-item variables on Form 6251 (model gap, upstream); (2) even then, survey microdata has no ISO-exercise records, so the input would need imputation from SOI aggregates. Until either happens, AMT should be treated as a documented structural understatement in validation — expected ~40% of actual — rather than a calibration defect.

Found via the SOI-actuals baseline backtest (PolicyEngine/calibration-diagnostics reform-validation page).

Start with the SOI-actuals baseline backtest and the reform-validation page, then inspect the evidence in populace_us_2024.h5 and the stated Form 6251 model gap. Confirm whether the repository can document the structural understatement; a complete fix would require preference-item variables in policyengine_us and imputation from SOI aggregates.