“No new taxes!” – Congress delivers AMT patch
I’ve often wondered about this line from George H.W. Bush’s speech at the Republican Convention. Hard to believe that it’s already been 20 years. Maybe he actually meant “No new Texas!” It’s an easy mistake. But I digress.
About this time of year, with the holidays in the rearview mirror, the minds of the few remaining American taxpayers turn to (drumroll) taxes. The good news is that 2008 is here. The bad news is that it’s time to rev up the 2007 tax return machine and the job hasn’t got any easier. For taxpayers affected by the alternative minimum tax (a.k.a. “AMT”), the IRS expects a month-long delay in processing tax refunds because Congress fought for so long over the “AMT patch.”
On the other hand, the Senate and House did finally bridge their differences, in late December, agreeing to increase the AMT exemption. The compromise bill is expected to be signed soon by President Bush. This is good news.
More good news, in my view, is that the compromise made House Ways and Means Chairman Rangel deeply unhappy. Whatever makes Rangel unhappy, I take as a good sign. Quoth Rangel:
This is an extraordinary time because the Republican minority in the Senate, bolstered by a lame-duck President, has actually dictated to the House of Representatives what they will or will not do with regards to this critical tax relief.
Hell hath no fury like a chairman scorned. Rangel wanted a bill that would impose other tax increases to “offset” the “costs” of the increased AMT exemption which, in turn, were necessary to offset the fact that inflation was driving many more Americans into the AMT swamp than Congress originally intended.
Rangel, however, sees money or property left in the hands of taxpayers as “costs” in the sense that anything that the government fails to take is something that it could — and therefore should — have taken. In some parts, this is called “might makes right” and is considered unethical. Not so, apparently, in the U.S. House of Representatives.