AMT Patch Passed for 1 yr
US House today passed, 352-64, the Alternative Minimum Tax (AMT) patch which will for one more year ensure 20 to 25 million middle class taxpayers do not become ensnared by a tax originally designed for millionaires. The Senate has already approved it and President George W. Bush will sign the bill.
The majority Democrats lost support from "Blue Dog" fiscal conservatives in their own party because the because the Blue Dogs argued that the AMT cost $50 billion. Their reasoning is flawed in that the AMT taxes were never intended to be collected from the middle class and therefore Congress should not have planned on these funds from the AMT which should have been repealed. Inf act it would have been in during the Clinton administration but Clinton vetoes the bill that would have eliminated the AMT. As always, Democrats even "conservative" blue dogs have never met a tax they didn't like.
AMT is a parallel tax system and was enacted in 1969 to make sure rich people did not take advantage of so many breaks that they paid no income tax. The AMT that throws out most of the deductions and credits allowed by the regular income tax code. People have to calculate their taxes under the two systems and pay the higher of the two bills. However, the AMT was not index to adjust for inflation and since 1969 more middle class people have been exposed to the AMT as incomes have risen with inflation. The relief will ensure that most families earning less than $150,000 a year will not pay the tax. If Congress had failed to enact relief, families making $67,000 could have been subject to the tax.
Tags: alternative minimum tax, AMT, US Congress To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
The majority Democrats lost support from "Blue Dog" fiscal conservatives in their own party because the because the Blue Dogs argued that the AMT cost $50 billion. Their reasoning is flawed in that the AMT taxes were never intended to be collected from the middle class and therefore Congress should not have planned on these funds from the AMT which should have been repealed. Inf act it would have been in during the Clinton administration but Clinton vetoes the bill that would have eliminated the AMT. As always, Democrats even "conservative" blue dogs have never met a tax they didn't like.
AMT is a parallel tax system and was enacted in 1969 to make sure rich people did not take advantage of so many breaks that they paid no income tax. The AMT that throws out most of the deductions and credits allowed by the regular income tax code. People have to calculate their taxes under the two systems and pay the higher of the two bills. However, the AMT was not index to adjust for inflation and since 1969 more middle class people have been exposed to the AMT as incomes have risen with inflation. The relief will ensure that most families earning less than $150,000 a year will not pay the tax. If Congress had failed to enact relief, families making $67,000 could have been subject to the tax.
Tags: alternative minimum tax, AMT, US Congress To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 6:18 PM - Post Link
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