AMT Follies
The Democrats rode to victory in the 2006 elections promising change. They have changed things. Unfortunately, the change is to make things worse. The latest debacle is the promised 'patch' for the Alternative Minimum Tax, imposed by Democrats years ago and now trapping more and more middle class taxpayers. Harry Reid flubbed getting anything done before the Thanksgiving break and millions of tax refunds will now be late. The follies continue, however. This time, support for a tax hike to offset the patch are the problem - and intense lobbying (read gobs and gobs of campaign cash) have killed any chance of getting that hike.
Both parties expressed doubt, however, that enough votes could be mustered to approve tax increases sizable enough to replace the revenue lost from the patch. Republican senators and a growing number of Democrats have been echoing Bush's preference for the AMT to be altered without offsetting tax increases.
Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee, said he expected that the Senate would approve an AMT patch soon but that it would be free of offsetting tax increases. "The votes aren't there in the Senate for offsets," he said.
The top Republican on the House Ways and Means Committee, Jim McCrery of Louisiana, agreed: "We're going to end up doing a one-year patch with no offsets."
Since winning control of Congress, Democrats have repeatedly vowed to fix the AMT. They have also said they would adhere to new rules, approved by the Democratic majority, that require any new spending or tax reductions to be paid for with spending cuts or revenue increases. Those rules, however, can be waived if large enough majorities agree.
Last month, the House narrowly approved a 10-year, $73.8 billion measure that would protect middle-income households from the AMT in part by increasing taxes on wealthy Wall Street financiers. The legislation also extended for a single year some three dozen tax breaks due to expire at year's end, including deductions for tuition expenses and state and local sales tax payments.
But the Senate has yet to approve corresponding legislation. The leading version of the bill that Reid tried to bring to a vote yesterday would have patched the AMT without offsetting tax increases. Sen. Max Baucus (D-Mont.), chairman of the Financial Services Committee, has said he doesn't think there are enough Senate votes to offset an AMT patch.
A major reason for that deficiency is the effectiveness of the Wall Street lobby. Private-equity firms, whose multibillion-dollar deals have created a class of super-wealthy investors and taken many large corporations private, hired dozens of lobbyists and stepped up campaign contributions this year. They were retained to protect a special tax rate paid by investment firm managers on their income under a long-accepted interpretation of tax law.
You bet it was effective. Expensive, too. $11.7 million dollars handed to campaigns in the past nine months. Notice where support for the tax hike is slipping: among Democrats. Wonder where that money is going? It has been widely reported before that the majority of campaign contributions from the investment firms are going to the Democrats. Yep, they changed things alright.
Who the checks are payable to.
By FedUp, Wednesday, 5 December , 2007 @ 12:35 pm
congress can screw around with a lot of things (and I think they’ve covered them all), but don’t mess with our taxes! I got caught in the wonderful AMT 2 years in a row - that’s AFTER paying my fair share to Uncle Sam through my paycheck. These idiots better fix the AMT PDQ - the more people that get caught up in this travesty, the more people are going to vote with their wallets. Charlie Rangle deserves a big wet raspberry for his part in this tragi-comedy!
I’m sick of Harry playing politics with our country! If the people of Nevada vote him back in next time he’s up for re-election, SHAME ON THEM!!!
By Neo, Wednesday, 5 December , 2007 @ 2:13 pm
For evey one who has to pay the AMT, I can only say .. how does it feel to be “rich” ?
By FedUp, Wednesday, 5 December , 2007 @ 3:01 pm
Yeah… Rich! That’s why I had to borrow money to pay my damn taxes… I wanted to send the bill to Harry… but I don’t think he can “reid” or even get the point. Jerk! And that goes for the rest of Congress and all their paid days off…