AMT ‘Patch’ Wins Approval of Ways and Means Panel

[brooklynite]

Source: Congressional Quarterly

The House Ways and Means Committee approved a one-year “patch” to the alternative minimum tax on Wednesday, but the bill is likely to see major changes before it becomes law.

The committee voted 22-16, along party lines, to approve the bill after turning aside three Republican amendments.

The measure would prevent 21.4 million taxpayers from paying the AMT for tax year 2008. That part of the bill has wide acceptance among lawmakers, but there are sharp splits over whether the bill should be offset.

Democrats insist that the $62 billion bill should comply with the House’s pay-as-you-go rule.

Read more: http://www.cqpolitics.com/wmspage.cfm?docID=cqmidday-000002899742

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Doesn't that mean Republicans voted for a tax increase?

[JuniorPlankton]

1. It's more of a blue state vs. red state thing

The people who are hit the hardest live in the state with expensive real estate and higher salaries (AMT limits mortgage deductions, etc.)
As you can guess, these states include NY, CA, MA and so on.

[Igel]

2. No, only if you ignore context.

Few like the AMT. The problem is, What do we do about it? While it was a mediocre idea, it was allowed to fester and grow until now it's a horrendous problem.

Here's the crux of the current wrangle:
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“Not only are we doing the right thing in paying for it, but we’re also doing the right thing in removing some of the inequities that exist in the code,” said Chairman Charles B. Rangel , D-N.Y.
But Republicans say that is unnecessary, and leading Senate Democrats concede that, like a version enacted last year, the AMT patch will not be offset.
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In other words, do we "fund" mitigating the AMT or don't we? If we "fund" it, it means cutting spending or raising taxes elsewhere. If we don't, it increases the deficit. Repubs: Let the deficit increase, since there's no chance in hell of cutting anything (what's cut would be a function of ideology--hate the war, cut war spending; hate the military, cut military spending; hate entitlements, cut entitlement spending; etc.). Dems: No, we want to "offset" the spending, i.e., replace the tax cut to the upper 15-20% of the population by having some tax increase, presumably one affecting the top 2% of the population (because there's no way in hell they'll be able to cut anything without running into the same set of chainsaws from the previous set of parentheses).

In other words: The repubs insist on making sure there's no offset. The dems insist on it, but "leading Senate Democrats" say it'll go the way the repubs want anyway. *Why* it'll go that way will be the subject of a serious debate and this will furnish talking points. My POV: This is a political play, sufficient dems will gladly vote for a non-offset-based defanging of the AMT without any qualms, while making pained faces in public and pointing to this as evidence about how much they really, really care.