Abolish AMT, says Baucus

The chairman of the Senate Finance Committee said this morning that he would like to abolish the alternative minimum tax, but failing that, he expects that legislation delaying its impact on middle-income taxpayers will be approved by Congress this year. Speaking with reporters at a breakfast meeting at the National Press Club in Washington, Sen. Max Baucus, D-Mont., downplayed the possibility of enactment this year of sweeping tax reform legislation beyond a one-year “fix” for the unpopular AMT. Mr. Baucus said he has been talking to House Ways and Means Committee Chairman Charles Rangel, D-N.Y., about a tax bill. “Where we can pay for it we should extend some of the middle-income tax cuts,” such as the lowest 10% income tax bracket, the adoption tax credit, the child tax credit, and eliminate the penalty for married couples, said Mr. Baucus. “I also believe that AMT should be repealed, frankly,” Mr. Baucus added, noting that he has sponsored legislation that would abolish the separate tax system. But Congress will likely end up just extending AMT relief for another year, as it has done in the past, he said. Mr. Baucus also de-emphasized the possibility of new taxes on hedge funds, private equity funds and venture capital funds, but he acknowledged that he and Senate Finance Committee ranking minority leader Charles Grassley, R-Iowa, are having discussions on the topic. “The differentiation between ordinary income [taxes] and capital gains [taxes] puts a lot of strain on some taxpayers; there’s no doubt about that,” Mr. Baucus said. “The fundamental question is the degree to which income gain [such as fees are] ordinary income or cap gains,” he said. “The differentiation between ordinary income [taxes] and capital gains [taxes] puts a lot of strain on some taxpayers; there’s no doubt about that,” Mr. Baucus said. “The fundamental question is the degree to which income gain [such as fees are] ordinary income or cap gains,” he said.