AMT relief bill moves to Senate

The House of Representatives approved legislation yesterday that would relieve about 25 million middle-class taxpayers from paying the alternative minimum tax this year. Approved by a vote of 393-30, the bill now goes back to the Senate, which passed an ATM “patch” Sept. 23 as part of an energy bill. No tax increases were included in either version of the AMT relief bills, which are estimated to cost about $65 billion over 10 years. If the legislation is enacted, about 4.2 million taxpayers will still be subject to the AMT, which was created in the 1960s to prevent high-income people from escaping income taxes through “loopholes.” The original legislation was never indexed for inflation, and it now would affect millions of middle-class households. Under the legislation, joint filers earning up to $69,950 annually and individual taxpayers earning up to $46,200 would be exempt from the AMT. The bill also provides relief from the AMT for taxpayers who have exercised stock options. House Ways and Means Committee Chairman Charles Rangel, D-N.Y., who authored the House bill with Ways and Means ranking member Jim McCrery, R-La., called for enactment of comprehensive tax reform that would repeal the AMT. “I am eager to hit the ground running with the next administration to simplify the code and make our tax laws work for working families,” Mr. Rangel said in a statement.