Congress Averts Higher Tax Bill for Middle Class

By DAVID M. HERSZENHORN

WASHINGTON — Congress on Wednesday gave final approval to a plan that will spare millions of middle-class taxpayers higher tax bills for 2007. The White House welcomed the development and said President Bush would sign the bill.

The tax reprieve postpones for one year only an expansion of the alternative minimum tax, a parallel tax system enacted in 1969 to prevent very wealthy investors from using deductions and tax shelters to avoid paying income tax altogether. The alternative tax has ensnared a growing number of middle-class Americans in recent years because the 1969 law was not indexed to inflation.

Without the fix by Congress, some 25 million filers would have had to pay the tax on their 2007 income, up from four million who paid it on 2006 income, according to the White House.

The Bush administration took a swipe at Congress, saying that the late action by lawmakers might still cause delayed refunds for up to 38 million filers.

The measure would increase slightly the amount of income that is exempt from the alternative tax. For individuals, that means the exempt amount increases to $44,350 in 2007 from $42,500 in 2006. For married couples, the exemption amount climbs to $66,250 from $62,550.

The alternative minimum tax requires taxpayers — generally those who deduct items like high medical expenses and state and local taxes and who claim credits for dependents — to make separate calculations and pay the one producing the higher figure.

(from the NYT)

It's not dead... they adjusted it for a whole 5.6%...

WOOOPITY DOO!

We all know that the ideal tax code is one that gives every taxpayer the illusion that he's being given a special break.

Yeah, there is a one-year reprieve. But the money that was going to come in from the AMT was already in the budget. Senate Republicans refused to pay for the reprieve, so they forced Congress to add $50 billion in debt instead of compensating by raising taxes on some wealthy individuals (notably private equity managers who pay lower taxes than other money managers only because they've structured their investments as partnerships).

The really frustrating part is that 27 of the 49 current Republicans were also Senators in 1997 when they all voted for a balanced budget amendment to the Constitution. I guess their commitment to protecting the biggest beneficiaries of the Bush tax cuts overwhelms their supposed commitment to fiscal responsibility.

Don't kill the AMT!!! It makes it so easy to get money out of my checking account whenever I want.

RR

T1...

Poor attempt Robert...

Well, on my first paycheck of this year I received an extra $.41 for every $500 I make. .41 x 52 = 21.32

Wow! I think I'll use it to buy 6 gallons of gas.

Come to think of it, D-elvis; do you want the AMT repealed altogether or would you just want it scaled back so that only truly rich &^%*^%#@$@!s have to pay it?

But D-elvis is one of those rich &^%*^%#@$@!s you're talking about: he's an attorney and corporate officer. While he sometimes talks a good game about leaving the trappings of wealth and power for a simpler, Walton-like life, we know he can't give up the chauffeured limousines, country clubs, and famous movie starlets/lingerie models that have become a part of his accustomed lifestyle. He's stuck with the AMT.

$hit... outed