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President Bush demanded Saturday that Congress send him legislation that keeps middle-class Americans from being hit at tax time next year by the dreaded alternative-minimum tax. That's not likely to happen anytime soon. Congress has adjourned for the Thanksgiving holiday. The legislation is muddled in the House and Senate. And Mr. Bush has threatened to veto any bill that raises taxes as a way of fixing the tax, known in shorthand as AMT. "I will veto any bill that raises taxes as a condition of fixing the AMT," Mr. Bush said in his weekly radio address. "Members of Congress must...

...Internal Revenue Service officials warn that millions of people may face delays in having their returns processed next year and getting billions of dollars in refunds. The problem: Congress still hasn't approved temporary relief for many people from the alternative minimum tax, or AMT... Some lawmakers predict Congress probably won't take action until next month. If so, that could spell major trouble, Treasury and IRS officials warn. That's because it takes time for the IRS to reprogram its computerized processing systems to reflect last-minute changes made in Congress, says Terry Lemons, an IRS spokesman... "As we look at the upcoming...

Nov. 12, 2007 (SmartPros) -- The U.S. Chamber of Commerce expressed its disappointment over the Temporary Tax Relief Act of 2007, passed by the House on Friday. The nearly $80 billion bill includes provisions that provide alternative minimum tax relief, and extends a number of tax provisions set to expire this year. The bill is not "tax relief" as advertised in its title, the Chamber said, but a tax shift from individual taxpayers to businesses, putting American jobs and the economy at a disadvantage compared with our growing global competitors. "While the Chamber supports an extension of alternative minimum tax...

WASHINGTON -- Capping a spirited debate, the Democratic-led House voted Friday to shield more than 23 million Americans from a tax hike this year under the alternative minimum tax -- and hit up wealthy managers of private equity firms and hedge funds to make up the difference. The 216-193 vote, which fell largely along party lines, escalated an emerging political war over tax fairness and the proper treatment of an elite class of investment managers who have benefited from the tax cuts of recent years. It sparked angry Republican charges that Democrats were rushing to approve ill-advised tax hikes. For...

Fiscal Policy: To stop the Alternative Minimum Tax from imposing a big tax increase, Democrats are pushing — you guessed it — a big tax increase. Republicans have a better fix: taxpayer choice.For the past couple of years, congressional Democrats have surprised many by actually discovering a tax they don't like. The AMT was cooked up in 1969, when the federal income tax system was far more convoluted than today, as a means of preventing a tiny handful of fewer than 200 high-income households from using deductions to avoid all or almost all income tax liability. Unindexed for inflation, this...

WASHINGTON — For the first time since 2001, it’s not clear that Congress will pass an annual temporary “patch” in time to prevent the creeping Alternative Minimum Tax from forcing up tax payments for millions of unsuspecting middle-class taxpayers. In addition, if Congress doesn’t “patch” the AMT tax within 10 days — and it appears highly unlikely to do so — then the partisan bickering among lawmakers could delay tax refunds next year for tens of millions of Americans. Democrats in control of Congress pledge to do as Republicans have done in recent years and prevent the AMT from hitting...

The House's top Democratic tax writer outlined a $1 trillion plan Thursday to eliminate the alternative minimum tax and ease the tax burdens of most people by asking the rich and some companies to pay more. ''We have attempted to restore equity and fairness to the system,'' said Rep. Charles Rangel, chairman of the House Ways and Means Committee... House GOP leader John Boehner of Ohio said the ''mother of all tax hikes'' would ''doom our economy'' and put people out of work. The second-ranking House Republican, Rep. Roy Blunt of Missouri, said his party would use the proposal to...

<p>WASHINGTON -- Wondering how Democrats might approach income taxes in this already heated election season?</p> <p>The House tax panel chairman introduced a bill Thursday that would repeal the alternative-minimum tax and substitute the loss of nearly $800 billion over 10 years with a "replacement tax." The new surtax would kick in for couples with incomes more than $200,000 and singles making at least $150,000. (The specific threshold would be set by the Treasury Secretary.) The surtax would be 4% for most people but would rise to 4.6% on incomes of more than $500,000.</p>

WASHINGTON -- Meeting reporters at breakfast last week, Secretary of the Treasury Henry Paulson set as his tax priority a "patch" to slow the runaway Alternative Minimum Tax (AMT). The former investment banker acted as though he were oblivious to plans by Rep. Charles Rangel, chairman of the House Ways and Means Committee, to turn the need for such a temporary tax fix into the most radical left-wing tax revision in half a century. When one questioner asked whether Paulson contemplated recommending a presidential veto of AMT legislation, he indicated astonishment at the very idea. His only stated concern was...

To add to the mortgage meltdown miseries, the credit panic, the plunging home sales and the rising foreclosures, here's a new worry: a proposed cutoff of mortgage-interest tax deductions for houses with more than 3,000 square feet. One of Capitol Hill's most experienced and most powerful legislators is drafting a "carbon tax" bill that would do precisely that. The chairman of the House Energy and Commerce Committee, John D. Dingell (D-Mich.), expects to introduce comprehensive climate-change legislation when Congress returns next month. Besides imposing hefty new federal taxes on gasoline, the forthcoming bill would, in Dingell's words, seek to "remove...

A Democratic proposal to raise taxes on the private partnerships that are behind buyout mania on Wall Street has a good chance of passing because legislators plan to couple it with an extension of Alternative Minimum Tax relief — a combination President Bush would have a hard time vetoing. The higher taxes would be imposed on private equity and hedge funds — and possibly real estate and other private partnerships — to generate as much as $80 billion in revenues that could pay for two years of relief from the Alternative Minimum Tax, or AMT, investment analysts estimate. AMT relief...

WASHINGTON – Working middle-class families threatened by the Alternative Minimum Tax (AMT) next April would save money under legislation introduced today by U.S. Sen. Jeff Sessions (R-AL). Sessions’ bill, the Saving Families First AMT Relief Act of 2007, would allow taxpayers to claim personal exemptions under the AMT to reduce their taxable income subject to the alternative tax rules. Current law prevents AMT taxpayers from claiming personal exemptions, as most taxpayers do under normal tax provisions. The personal exemption in the 2007 tax year is $3,400 per person. “By allowing personal exemptions under the AMT, we will be providing tax...

Leading Democrats in Congress and on the presidential campaign trail are having a difficult time agreeing on what it means to be wealthy. House Speaker Nancy Pelosi (D-Calif.) has said it means earning $500,000 or more annually. Sen. Charles Schumer (D-N.Y.) contends that raising the tax rate on families making more than $400,000 could offset legislation to slash taxes on the middle class.

Federal Deficit Sharply Lower Jun 12 03:28 PM US/Eastern By MARTIN CRUTSINGER AP Economics Writer WASHINGTON (AP) - The federal deficit is running sharply lower through the first eight months of this budget year as growth in revenues continues to outpace the growth in spending. The Treasury Department said that the deficit through May totaled $148.5 billion, down 34.6 percent from the same period a year ago. That improvement came even though the deficit in May increased to $67.7 billion, up 57.8 percent from May 2006. However, analysts attributed this big increase to the fact that the Internal Revenue Service...

One Plan Would Impose Surtax Of 4.3% on Richest Households House Democrats looking to spare millions of middle-class families from the expensive bite of the alternative minimum tax are considering adding a surcharge of 4 percent or more to the tax bills of the nation's wealthiest households. Rep. Richard E. Neal (D-Mass.), chairman of the House subcommittee with primary responsibility for the AMT, said that option would also lower AMT bills for families making $250,000 to $500,000. And it would pay for reductions under the regular income tax for married couples, children and the working poor. All told, the proposal...

...Mr. Rangel and other key Democrats ...have come up with their plan to protect the middle class from the growing reach of the Alternative Minimum Tax (AMT). If nothing is done this year, 25 million workers will be liable to the AMT when they pay their taxes next April. So to defuse this political time bomb the House plans to exempt families with incomes below $250,000. So far so good. But the Democrats' dilemma is to figure out how to come up with the $650 billion of revenue this stealth tax would have raised... The top AMT rate would increase...

Congress will have to steer carefully to avoid a shock to the economy as it strives to balance the budget by allowing tax cuts to expire in the next few years, economists say. The biggest danger is the alternative minimum tax (AMT), which this year is scheduled to cut deeply into the pocketbooks of as many as 23 million upper-middle-income taxpayers unless Congress extends tax relief. President Bush's budget and the House and Senate spending plans rely on the expiration of AMT relief to achieve balance in the next five years. Mr. Bush's budget provides a one-year fix of the...

House Democrats, aiming to seize taxes from Republicans as a political issue, have come up with a plan to shift the burden of the hated alternative minimum tax onto the shoulders of the nation's richest households... Because it was not indexed for inflation, the AMT delivered a significant tax increase to an estimated 3 percent of households this year. Unless the law is changed, it is projected to strike nearly 20 percent of taxpayers when they file returns next spring, many earning as little as $50,000 a year. House Democrats are trying to craft legislation that would spare those households...

Just in time for tax filing season, the Tax Foundation and Congress' Joint Committee on Taxation have compiled some useful facts about the federal tax system. Following are a few worth thinking about as taxpayers write their annual checks to Uncle Sam. c In 2005, the federal government took $2.4 trillion out of the pockets of the American people. To put this number into context, it is about the same as the size of the entire U.S. economy in 1959 in inflation-adjusted terms. Only two other countries on Earth have economies as large as our federal government: Germany and Japan...

On March 23, Grassley sponsored an amendment to the Senate's 2008 budget bill that read, "To amend the budget resolution for fiscal year 2008 in order to accommodate the full repeal of the Alternative Minimum Tax preventing 23 million families and individuals from being subject to the AMT in 2007, and millions of families and individuals in subsequent years." Seems fairly straightforward doesn't it? With the previous statement by Baucus and support of liberals like Chuck Schumer (D-NY), this amendment probably sailed right through with nary a dissenting vote. Except that it didn't. The vote wasn't even close. A bipartisan...