Last-Minute AMT Fix Passes House
At almost the last possible minute this year, the U.S. House of Representatives has passed a temporary alternative minimum tax relief measure that is expected to save some 23 million middle- and upper-middle-class taxpayers up to $2,000 on their 2007 tax bills.
The temporary fix, which adjusts the 1969 alternative minimum tax for inflation for the 2007 tax year, is in accord with one that has previously been approved by the Senate. It will now go to President George W. Bush, who has said he will sign it, reports Bloomberg. Because the House vote came so late in the year, however, tax form information will have to be revised and refunds may be delayed for those who need to take advantage of the AMT tax relief measure.
As discussed in a prior ABAJournal.com post, the American Bar Association recommends that the AMT be repealed or modified because it no longer serves its original purpose. “The minimum tax was created in 1969 as a backstop to the regular tax system after lawmakers learned that hundreds of millionaires were avoiding paying any tax by claiming excessive deductions and exemptions,” explains Bloomberg in another article that was published last month. “The tax was never indexed for inflation and now hits households with incomes between $200,000 and $500,000 and can affect families with incomes as low as $50,000.”
New York Times: “Congress Votes to Spare Millions From Alternative Tax.”
Reuters: “House approves alternative minimum tax bill.”
Wall Street Journal (sub. req.): “Gifts From the Hill.”