A time frame for AMT legislation
What is the likelihood that legislation limiting or repealing the AMT will pass anytime soon, given that the House and Senate are clashing over whether to offset the revenue loss?
|Rangel on tax reform|
First of all, the alternative minimum tax will not be hitting anyone this year. As I talk with you, there is a big problem as my Committee meets this afternoon and ultimately will send a patch, or at least an extension of the alternative minimum tax to delay it from happening this year and we will pay for it. That is, we will raise the revenue that's necessary to offset the $50 billion that would be lost as a result of the temporary patch. But at the end of the day, rest assured that we cannot afford to hold the people hostage -- the 25 million people -- for a tax liability that was never intended to fall on them. [Editor's note: Within a week of the original publication date of this interview, Congress passed legislation that extends AMT relief for one year to some 23 million taxpayers. However, the cuts were not offset by tax increases, much to the dismay of Democrats.] What we should do, however, as I do in my major bill, is to abolish the alternative minimum tax completely because each year we put it off, it costs more and more with the money that's being borrowed.
|Do you see the AMT getting abolished anytime soon?|
Well, I'll be pushing for it early next year, and it depends on what the political climate is. One of the challenges is the fact that to abolish it, it's just that some people refuse to pay for it, and it's a very expensive process.
Tax hike vs. tax code reform
Republicans have been attacking your proposal, calling it "the largest individual income tax increase in history." How do you defend the tax hikes projected in the bill, such as the surtax?
At the end of the day, if there's no more revenue raised, you can't say that I'm raising taxes, except on a million people. The Joint Committee on Taxation has supported what our tax writers have come up with. And that is 93 million people receive tax reductions and about a million and a half receive increases and so, how they do they defend whatever the allegations they're making?
Another complaint is that your legislation will hurt small business owners and farmers who pay their income taxes as individuals. What is your response to this criticism?
We have specific legislation in the bill that provides additional tax breaks for small business people and so there's an assumption that every small business person is going to receive a tax increase who makes over $500,000 a year. That's not necessarily so, and so the connection between small business and individual annual income is a stretch.
|-- Updated: Dec. 26, 2007|