AMT ‘fixed’ … for a year, anyway
The debate over what to do with the Alternative Minimum Tax isn't going away anytime soon, even after the U.S. House of Representatives passed a bill that will provide one year of relief for 21 million taxpayers who likely would have felt the AMT's sting.
President Bush has indicated he will sign the bill, so the question now is this: What are lawmakers going to do when the one-year patch expires? Their options could include enacting another one-year patch or getting rid of the AMT altogether. There seems to be little disagreement that the AMT cannot continue in its current form. Differences of opinion begin surfacing, however, when talk turns to the revenue generated by the AMT -- and specifically, how to replace that revenue if (or when) the AMT is repealed.
This Associated Press article illustrates those differences of opinion.
- Here's House Majority Leader Steny Hoyer, a Maryland Democrat: "There is no disagreement between Republicans and Democrats over protecting the middle class from the AMT. The question is, will we do so responsibly or charge tens of billions of dollars to our grandchildren?"
- And here's Rep. Eric Cantor, a Virginia Republican who said his party's position "has been consistent down the line. We don't believe we ought to raise taxes to correct the mistake of AMT."
Are lawmakers just delaying the inevitable by enacting a short-term fix? What will happen a year from now? Give us your ideas for fixing -- really fixing -- the AMT mess.
UPDATE: The IRS says it will work to quickly and accurate implement the AMT patch. Read more here.