New AMT Patch Passes Committee

According to this story from the AP on Wednesday of last week, the Ways and Means Committee voted 22-16 on a new AMT patch.

The new law (if it makes it that far) would shield “more than 20 million largely upper-middle-class families from shelling out thousands of dollars for the AMT in 2008, a concept that nearly all lawmakers support.” Its the way to pay for it that pits the Ds vs the Rs.  The Ds want to offset the $61.5 billion cost of the relief by bringing in more revenue by taxing corporations…  The Rs are (shockingly) opposed to this.

But in a repeat of last year, Democrats insisted that the $61.5 billion cost of the relief must be made up by bringing in new revenue, mainly from corporations. Republicans were equally insistent that that will never happen, saying that tax relief for some people should not result in what they regard as tax increases for others.

Last year, after months of wrangling, Senate resistance and a presidential veto threat, House Democrats gave in, and on the last day of the session in December Congress approved an unpaid-for AMT bill. The late vote delayed refund checks for millions of taxpayers while the Internal Revenue Service reprogrammed its computers to comply with the new law.

[…]

The Ways and Means bill would raise about $31 billion over 10 years by increasing the tax rate on the share of investment profits received by private equity and hedge fund managers, also known as carried interest. It would disallow certain deductions some oil and natural gas companies receive for domestic production, bringing in $13.6 billion.

[…]

The measure, said committee chairman Charles Rangel, D-N.Y., “would deliver this tax relief to middle-class families without adding to the deficit and without forcing future generations to pay for the decisions we make today.”

But the top Republican on the panel, Jim McCrery of Louisiana, said he “took comfort in this bill’s dim future and hope that we can work together soon to enact an AMT patch without offsets.”

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