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WASHINGTON -- The competing tax plans laid out by Sens. Barack Obama and John McCain would both add trillions of dollars to the national debt and could add to the tax system's complexity, a nonpartisan tax research group concluded Wednesday in a newly released report. Both campaigns have asserted that their plans to continue many Bush-era tax cuts and offer new reductions would aid the economy without requiring massive new spending. But the Washington-based Tax Policy Center warned that under either candidate, "the debt would likely continue to rise as it has over the past eight years." Obama's plan --...

With the annual exercise to limit its effect afoot, there is again much consternation over the alternative minimum tax. Forcing ever more taxpayers into a more onerous parallel tax system, the AMT has earned its place as the tax Yet despite elevated publicity, its effect is only a fraction of that coming in 2011 when the 2001 tax cuts expire. In fact both, not simply the AMT, demonstrate a tax system completely awry and two tax increases that must be avoided. The AMT is a prime example of government compounding problems it created. Conjured into its first incarnation in 1969,...

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday shot down a Republican attempt to pressure the chamber into supporting a tax package and Alternative Minimum Tax patch this month, saying the provisions must first be funded. Reid spokesman Jim Manley responded to a letter from Minority Leader Mitch McConnell (R-Ky.) and ranking Finance Committee member Chuck Grassley (R-Iowa), who had written Reid to press for action on those ideas before Congress’s next recess in August. “Sen. Reid shares the desire to complete work on the tax extender/energy tax incentives bill before the August recess,” Manley said. “However, it is puzzling...

The House of Representatives on Wednesday approved a bill that would protect about 25 million taxpayers from paying a tax that originally was meant for only the very wealthy. The House passed the alternative minimum tax relief bill on a vote of 233-189 over the objections of the White House, which does not like its revenue raising measures. One provision would require private equity fund managers to pay ordinary income taxes, as high as 35 percent, on their earnings instead of the 15 percent capital gains rate they now pay. That would raise nearly $31 billion over 10 years. "The...

When Speaker Nancy Pelosi took charge of the House in January, she pledged that Democrats would fight deficit spending and "restore pay-as-you-go budget discipline." Amid much fanfare, the new Democratic House passed a "pay-as-you-go" budgeting rule that required Congress to offset any spending increases or tax cuts. On Dec. 19, "pay-go" bit the dust. On that day, the House passed a bill to protect more than 20 million American households from an increase in the alternative minimum tax - without offsetting the $50 billion in lost revenue as pay-go promised. The 352-64 House vote followed an 88-5 Senate vote to...

SALEM – Presidential candidate Sen. John McCain outlined a detailed tax plan that he said would put $60 billion back in the pockets of middle class families in the first year he'd be President. The plan described as a "pro-growth" tax policy emphasized keeping taxes low for the middle class as well as for entrepreneurs who McCain said are responsible for creating jobs from market innovations. Speaking in front of an audience of about 100 people at Andover Corp., a company specializing in optical filter technologies, McCain outlined needs for tax reform to an income tax code that's become "disgraceful...

More than 20 million families will be spared an extra $2,000 tax hit on average after Congress excluded them from a higher alternative tax originally aimed at untaxed multimillionaires. An eleventh-hour 352-64 vote on Wednesday to put a one-year freeze on growth of the alternative minimum tax shields many middle- and upper-middle- income taxpayers from first exposure to the tax. In 2006, it affected 4 million. President Bush plans to sign the bill into law. Republicans, backed by a presidential veto threat against any tax increase, insisted that the AMT was never meant to affect millions of people and thus...

Congress votes 20 million taxpayers a break. So why are Nancy Pelosi and the Democrats so bummed? It's going to be a blue Christmas for Democrats in Congress--but not for some 20 million taxpayers who narrowly escaped being ensnared by the alternative minimum tax (AMT) this year. Before closing up shop for 2007, the House of Representatives Wednesday abandoned its strict budgetary rules, voting 352-64 to keep the AMT from rippling across America's upper-middle class. But this AMT "patch" adds more than $50 billion to the federal deficit, the latest in a string of legislative defeats for Democrats, who rode...

House is voting on fix to the AMT for 2008. Vote just started, live on CSPAN. Senate passed a similar bill about two weeks ago..

WASHINGTON, (AP) -- The Senate on Tuesday prepared to take another shot at blocking an Alternative Minimum Tax increase, the latest move in a seesaw struggle between the House and Senate over how to prevent millions of middle-class people from getting soaked by the tax this year. Senate passage could set the stage for a final House vote Wednesday, with Democrats acceding to White House demands that Congress pass an AMT fix without imposing some $50 billion in new taxes, mainly by closing loopholes on offshore tax havens, to make up for lost revenue. The two chambers for weeks have...

WASHINGTON — President Bush on Monday pushed Congress to pass a one-year fix to the "alternative minimum tax," which threatens to hit 23 million tax filers, warning that failure to do so could delay $75 billion in tax refunds next year. The alternative minimum tax, or AMT, is calculated alongside the income tax, with the taxpayer paying the higher of the two calculations. The AMT was passed in 1969 in a bid to close tax shelters for filers with incomes above $200,000, the equivalent of $1.2 million today. But it wasn't indexed to rise with inflation, so what was a...

WASHINGTON (AP) -- Confronting the Senate and White House, House Democrats for a second time passed tax relief for 21 million people, going after companies and hedge fund managers that shelter money offshore. The vote Wednesday was a near party-line 226-193. The White House responded with a veto threat and the Senate's top Republican said the House approach to fixing the alternative minimum tax was unacceptable. "The Senate will not pass a short-term fix for some, if it includes a permanent massive tax hike for others," said Sen. Mitch McConnell, R-Ky. But House Speaker Nancy Pelosi, D-Calif., said it was...

Congress has been brought to a grinding halt by hardening Democratic and Republican stances on taxes and spending just days before lawmakers begin leaving Washington for Christmas and New Year’s. The two sides are, in some cases, refusing even to speak to each other about the massive omnibus and an Alternative Minimum Tax (AMT) bill. Senate Republicans refused to meet Democrats Tuesday on spending and House Democrats rejected the Senate’s AMT “patch,” preparing a new version paid for with corporate tax increases. Senate Minority Leader Mitch McConnell (R-Ky.) countered the majority’s plans with a proposal that would require Democrats to...

The Alternative Minimum Tax may be the all-time winner of Good Ideas Gone Bad award. Written to make sure tax-dodgers didn't pile up deductions to escape the IRS, it's now threatening to sweep in 25 million taxpayers, up from four million last year. This headache of a tax grew in scope thanks to inflation and rising incomes as lower-earners graduated into a higher tier. But it's also provided a stage for Congress to display a knack for feuding instead of fixing. The result could be a longer tax season, ample confusion and deepening voter resentment. Since it was passed in...

Chart: Percentage of taxpayers paying the alternative minimum tax, by townA federal tax originally designed to prevent the super-rich from avoiding taxes altogether continues to dun more and more of North Jersey, including thousands of families earning less than $100,000.  The latest data from the Internal Revenue Service shows a dramatic increase in the number of North Jersey families required to pay the alternative minimum tax, which produces higher bills than the regular income tax.  New Jersey is home to the highest percentage of AMT payers in the nation.There is general agreement in Congress that the AMT is growing...

Republicans have rejected a request by Majority Leader Harry Reid (D-Nev.) that the Senate approve by unanimous consent a one-year patch to the Alternative Minimum Tax (AMT) with no accompanying tax increases. Democrats quickly made political hay of the GOP move, which contradicted earlier Republican calls for extending tax relief with no offsets. Sen. Max Baucus (D-Mont.) blamed Republicans for obstructing tax relief, and called Reid’s request a “huge concession” on the part of Democrats. “If the AMT hits more taxpayers next year, it’s because of the Republican caucus. That’s clear,” said Baucus, who chairs the Senate’s tax-writing committee. Sen....

WASHINGTON, (AP) -- The Senate voted Thursday to block a looming tax increase averaging $2,000 for millions of taxpayers after Senate Republicans succeeded in thwarting a Democratic plan to also raise taxes on investors. The Senate bill, passed 88-5, provides a one-year fix for the alternative minimum tax but without matching the cost of the tax relief with new tax revenues. Without the fix, an estimated 25 million people would be subject to the higher AMT tax, up from 4 million in 2006. The Senate vote puts it at odds with the House, where Democratic leaders, under a principle of...

Taxes: For a supposed lame duck, President Bush has managed to shield the country from the Democratic Congress' price of new taxes to stop the alternative minimum tax. Standing for principle works wonders.High-ranking Democrats in Congress seem to have come to the conclusion that, as Elvis might have put it, you can knock middle-class taxpayers down, step in their face, slander their names all over the place. Just don't step on their blue suede tax-refund checks. The Treasury Department has warned that the longer Congress delays fixing the AMT, the later some $75 billion in refunds, averaging thousands of dollars...

This morning President Bush gave a Conference to the press in the James S. Brady Press Briefing Room Transcript> Enoy your visit to Sanity Island

WASHINGTON, (AP) -- The Senate on Tuesday failed to come up with a plan for blocking an unpopular tax that could affect millions of taxpayers and already is causing disruptions in preparations for the upcoming tax filing season. Senate Democratic and Republican leaders, while agreeing that Congress must act immediately to stop the alternative minimum tax from hitting some 25 million taxpayers in 2007, up from 4 million in 2006, mutually rejected plans from the other side on how to proceed. "We all know this is a pernicious tax, a stealth tax," Senate Finance Committee Chairman Max Baucus, D-Mont., said....

WASHINGTON (AP) -- Silena Davis had counted on an early tax refund to pay for getting her teeth fixed. Now, because Congress has dawdled all year on a tax bill, she and millions of other early filers could have to wait extra weeks for refunds that last year averaged $2,291. The Internal Revenue Service is looking hard at delaying the start of its filing season, set to kick off on Jan. 14, if Congress fails to pass legislation in the next two weeks. At issue is how to handle what could be a dramatic increase in the number of people...

Hi, my name is Annabelle, and I'm a taxaholic. It's hard for me to admit this, but I think it's time to own up: I'm powerless over the idea that taxes are not a bad way to fund programs that might do some good for our country. My addiction has really gotten the better of me now that Bush has vetoed Congress's main social spending bill, which was to fund admittedly unworthy social endeavors like cancer research, mine safety, job training and Head Start. I'm sure you've all heard this tale over and over again. My problem started at parties...

Charles Rangel has offered up his prescription for tax reform. He refers to it as “The Mother of All Tax Bills.” He claims that his bill restores tax fairness and makes the wealthy pay “their fair share.” This congressional balloon juice is not only disingenuous, it is also wrong. What Charlie Rangel proposes is the Mother of all unjustified pay cuts. By repealing the tax cuts passed by George W. Bush, Charles Rangel takes thousands of dollars out of the pockets of the average American wage earner. In the State of Virginia, Rangle’s Bill will cost the average family $2,487....

WASHINGTON -- Habitual congressional gridlock usually has no impact on the lives of ordinary Americans. But what happened on the Senate floor last Friday just before lawmakers recessed for their Thanksgiving break will delay tax refunds next year for some 50 million taxpayers who count on them. The underlying reason is a 38-year-old congressional tax blunder that never has been corrected. In 1969, Congress passed the alternative minimum tax (AMT) to collect from 155 tax-avoiding millionaires. But because the scheme was not indexed for inflation, this year alone it would hit 23 million extra people with taxes higher than intended....

WASHINGTON (AP) -- 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. Bush says because the IRS had to send 2007 tax forms to be printed before AMT is resolved, many forms will be wrong. 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 Bush has threatened to veto any bill that raises taxes as a way of fixing the tax, known in shorthand as AMT. "I...

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...

April's Fools: One Born Every Minute April 02, 2007 By Herman Cain An old and popular English proverb cautions us that a fool and his money are soon parted. Senate Finance Committee Chairman Max Baucus (D-MT) is taking us all for fools with some of his recent statements and votes. On January 4, 2007, Senator Baucus spoke on the Senate floor about the imperative need to repeal the Alternative Minimum Tax (AMT). The AMT was enacted in 1969 to make sure that a handful of millionaires could not take advantage of completely legal tax deductions and shelters. Because Congress did...

AMT? Yes, it’s the alternative minimum tax, a poorly conceived, passive menace brought to you by inflation. The AMT—a parallel system with separate rates and fewer deductions—was written and passed to prevent the super rich from using deductions, credits and other shelters to avoid paying taxes. But because of rising incomes, this year the AMT is expected to ensnare 3.8 million taxpayers. Next year, the AMT exemption is scheduled to drop significantly, trapping another 20 million households, according to the congressional Joint Committee on Taxation. The quickest way to determine whether you’ll be swept up is to use the IRS’...

Is the AMT really the realization of the Flat Tax? Is it therefore actually more fair and democratic than the regular tax code? I wonder where my fellow Freepers stand on the issue of repealing, fixing or leaving in place, the AMT, which increasingly is going to become the main tax system in the country for people who actually pay taxes. On the one hand, it results in a higher amount of taxes paid, on the other hand, it seems like a fair, flat tax that a few years ago some conservatives claimed to like. I have my opinion, but...

<p>WASHINGTON - A tax law meant to crack down on wealthy tax dodgers has instead become the most serious problem facing millions of other taxpayers.</p> <p>For the government, the biggest problem is billions of dollars in unpaid taxes, National Taxpayer Advocate Nina E. Olson said Tuesday in a report to Congress on the hurdles Americans face in meeting their tax obligations.</p>

WASHINGTON (MarketWatch) -- The Senate's top tax writers kicked off the new Congress Thursday with a renewed call to repeal the alternative minimum tax. Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Charles Grassley of Iowa, the tax panel's senior Republican, introduced legislation that would eliminate the alternative levy, which initially, in 1969, targeted a handful of wealthy Americans who had paid no income tax. Because the AMT wasn't indexed to inflation, it has grown to threaten millions of middle-class taxpayers. 'The new Congress intends to provide tax relief to middle-income Americans in a fiscally responsible way, and the...