Magazine article Nation's Cities Weekly

Disagreement over Offsets Prevents Congress from Reaching Agreement on Tax Bill

Magazine article Nation's Cities Weekly

Disagreement over Offsets Prevents Congress from Reaching Agreement on Tax Bill

Article excerpt

The House and Senate continue to disagree over how to get tax relief to millions of Americans. Last week, the House passed modified legislation providing a one-year patch to the alternative minimum tax (AMT) and providing spending offsets. The passage of H.R. 4351, the AMT Relief Act of 2007, sets up a showdown with Senate lawmakers, who earlier this month passed an AMT one-year patch without spending offsets.

The issue of offset mechanisms to pay for the $55.7 billion cost for the one-year fix to the AMT has been an ongoing source of debate between the House and the Senate.

The AMT, which is not indexed for inflation, will reach 21 million more Americans in 2007 than it did in 2006 without the one-year patch. In an effort to prevent such a wide-spread impact upon American households, the House passed The Temporary Tax Relief Act of 2007, H.R. 3996, last month. In addition to creating a one-year AMT patch, that version of the bill extended several expiring tax provisions for one year and provided offsets primarily by taxing the income of private equity managers, venture capitalists, and certain real estate investors at ordinary income rates, instead of at the lower capital gains rate.

When it considered H.R. 3996 earlier this month, the Senate supported the AMT fix provisions of the legislation but disagreed with the offset mechanisms. In the Senate's view, the AMT was never intended to reach so many Americans, so no offset was necessary. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.