Bush threatens veto of tax bill

By a largely party-line vote of 226-193 the House yesterday approved legislation that would shield about 20 million taxpayers from the alternative minimum tax for 2007 by raising taxes on some hedge-fund managers. But President Bush has threatened to veto the bill, and AMT legislation approved by the Senate would not raise taxes on anyone. Treasury Secretary Henry Paulson said in a statement that he is “disappointed that the House has twice chosen to pass a bill that is unacceptable, and that further delays our ability to plan for the filing season.” Until legislation is enacted that provides AMT relief for 2007, the Internal Revenue Service will not be able to complete substantial preparations for the upcoming filing season, meaning as much as $75 million in refunds will be delayed for weeks, Mr. Paulson said. The AMT was enacted in 1969 to target a few wealthy Americans who had paid no income tax because of tax deductions. But the law was never indexed for inflation, and over time middle income households have become subject to it.