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California still faces a $19.1 billion deficit. The budget is over a month late, no negotiated compromise is in sight, and worst of all, no serious minds in Sacramento are even considering long-term solutions. What we usually get instead are short-term gimmicks, the most recent one now has been presented as part of the Democratic proposal to balance the budget. Darrell Steinberg, Democrat and Senate President Pro Tempore (leader), is suggesting a tax shift. His proposal cuts the state sales tax rate by 1.75% and raises income tax rates and car license fees to offset the sales tax reduction. This...

Back when he was running for president, Barack Obama vowed he'd never, ever raise taxes on individuals earning less than $200,000 a year or families earning less than $250,000. But of course he wasn't speaking for his allies in the Senate, who last Wednesday revealed a plan that would hit more than 30 million people with tax increases averaging $3,700 a year, starting in 2012. The vehicle would be the alternative minimum tax. Enacted four decades ago, the AMT was never indexed for inflation, so every year it potentially applies to more people who would have been considered wealthy in...

When members of the U.S. Senate finally head home this week, they will be leaving the future of 50 individual and business tax breaks in limbo. All expire at the end of 2009. Among the disappearing breaks are the research tax credit and an annual alternative minimum tax "patch," which keeps 23 million additional middle-income Americans from being forced into calculating and paying the dreaded AMT. (For 2009, with the patch in place, 4 million upper-middle- and high-income families will pay AMT.)

President Obama: America 'is not and will never be at war with Islam' WASHINGTON, April 6 /PRNewswire-USNewswire/ -- The American Muslim Taskforce on Civil Rights and Elections (AMT), a coalition of major national Islamic organizations, today applauded President Obama's Monday address to the Turkish parliament. SEE: In Turkey, Obama Stresses Partnership, Peace (Washington Post) http://tinyurl.com/claejt A statement issued today at a press briefing at the National Press Club in Washington, D.C., read in part: "We applaud President Obama's remarks and hope that they are a sign of improved relations between America and the Muslim world. In his speech, President Obama...

For Washington's tax writers, it is the best of times and the worst of times. On one hand, the alternative minimum tax, which has created political angst for years running, has already been "patched" for another year. On the other, a looming debate over the estate tax could be even more politically charged. Examining these two taxes -- with important similarities but a fundamental difference -- yields great insight into the dynamics of U.S. tax policy. Perennially "patched" to negate its unintended ensnaring of middle-income earners, the AMT has become the tax world's Sisyphean task. Its sizable cost -- and...

NEW YORK (Fortune) -- During the presidential campaign, Barack Obama tempered his pledge to substantially raise taxes for high earners with an important proviso: He'd simply restore rates to their levels during the Clinton Administration. The implication was that families in the upper brackets would see their total tax bite go back to the levels of the 1990s, but no higher. Now, it sure looks like Obama is reneging on that promise. The burden will indeed go far higher than in the Clinton years via a technicality -- one that will come as a rude shock even to the taxpayers...

Q: What are some of the tax breaks in the bill? A: It includes Obama's signature "Making Work Pay" tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama's original proposal of $1,000. It would begin showing up in most workers' paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January. There is also a $70 billion, one-year fix for the alternative minimum tax. The fix would save some 20...

Democrats want tax fix on Obama stimulus billConnecticut Post Staff Updated: 01/14/2009 10:08:33 PM EST WASHINGTON (AP) -- President-elect Barack Obama's Democratic allies are trying to use the president-elect's economic recovery bill to extend a tax cut for middle- to upper-income taxpayers despite concerns from his transition team that it won't boost the economy. Rep. Charles Rangel, D-N.Y., Congress' top tax writer, says both House and Senate members feel strongly about using Obama's stimulus package to make the annual fix to the alternative minimum tax to prevent more than 20 million additional tax filers from having to pay it. Making...

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...