“House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., succeeded in his promised effort to pass an alternative minimum tax (AMT) relief bill on December 12, but the new measure contains more than $50 billion in revenue increases that critics believe are unlikely to win support in the Senate. Rangel said that he introduced the AMT Relief Bill of 2007 (HR 4351) in hopes that GOP lawmakers would agree to pay for a one-year AMT patch, rather than forcing the federal government to borrow money to offset the cost. The bill passed the House on a party-line vote of 226 to 193.”
The bill would extend AMT relief for nonrefundable personal credits and increase the AMT exemption amount to $66,250 for joint filers and $44,350 for individuals, provide relief for AMT taxpayers who have exercised incentive stock options, and make changes to the refundable AMT credit. It also includes a provision to increase the eligibility of the refundable child tax credit.
“Chairman Rangel’s legislation removes provisions that would tax carried interest of private equity managers at ordinary income rates instead of the current capital gain tax rates, but would retain the provision to close a tax loophole that allows hedge fund managers to defer taxes by sheltering their pay in offshore tax havens”.
According to Ways and Means ranking Republican Jim McCrery, the Rangel bill will not survive a Senate vote. "We've been down this road before," McCrery said. Eventually House Democrats would be forced to accept an offset-free AMT bill. "Until that happens, considering AMT legislation with unnecessary tax increases does nothing-nothing except contribute to chaos in our tax filing season and delay tax returns for tens of millions of taxpayers," he said.
The White House is standing firm in its promise to veto an AMT tax fix package that is paid for by raising taxes elsewhere.
The longer this farce continues the longer the processing of tax refunds will be delayed!
I will continue to keep you posted on developments.