December 13, 2007 12:40 PM | Permalink |
On Wednesday, December 12, the U.S. House of Representatives passed a bill, H.R. 4351, that would extend the exemptions that keep the Alternative Minimum Tax (AMT) from affecting most Americans and would replace the $53 billion in revenue that the AMT would otherwise collect. The revenue would be replaced partly by restricting offshore tax avoidance schemes by wealthy individuals. Another provision that would help replace the AMT revenue would delay the implementation of an unnecessary tax break for multinational businesses which hasn’t even gone into effect yet.
Dropped from this bill is a provision that would end the tax subsidy for “carried interest,” a type of compensation paid to wealthy fund managers. Carried interest is currently taxed at a special, low rate of15 percent rate, lower than the tax rate paid by many middle-class families. Last week, Republicans in the Senate blocked a similar House-passed bill that would have ended this tax subsidy because they were committed to defending this break for millionaire fund managers. So, in the spirit of compromise, the House passed H.R. 4351 on Wednesday without the carried interest provision.
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December 12, 2007 12:46 PM | Permalink |
Letter from House Members to Leadership Demanding AMT Relief Cost be Offset, Citing CTJ Figures
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December 7, 2007 12:48 PM | Permalink |
On Thursday, December 6, Republicans in the Senate voted en masse against consideration of a bill (H.R. 3996) passed last month by the House of Representatives to provide relief from the Alternative Minimum Tax (AMT) and offset the cost by closing loopholes for extremely wealthy financial managers. Instead, Republican leaders demanded that the federal government borrow the $50 billion. They got their way later in the evening, when the chamber passed a bill simply extending AMT relief without paying for it.
This sets the stage for a standoff with the House, where Democratic leaders are adamant that no laws be enacted to increase the federal deficit, in keeping with the pay-as-you-go (PAYGO) rules that were reinstated when the Democrats took control of Congress earlier this year. But in the Senate, because 60 votes are needed to pass most legislation, the Republicans were able to block the fiscally responsible approach even though it was supported by every member of the majority party.
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