More On Tax Planningfrom The Advisor's Professional Library
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The Senate approved legislation December 6 designed to shield some 19 million American families from being hit by the alternative minimum tax (AMT) this year. Finance Committee Chairman Max Baucus's (D-Montana) amendment allows credits and increases the exemptions taxpayers can claim to avoid paying the AMT in 2007, which will prevent the "stealth tax" from applying to those who didn't pay it last year, the Committee said in a release. The amendment, which does not include offsets for the cost of AMT relief this year, a departure from the"pay-go" approach favored by the Democratic party, "passed after a House bill containing offsets failed to win sufficient votes--and after numerous minority objections before and after the Thanksgiving recess to requests for various votes on the AMT," the Senate Finance Committee release said. Pay-go requires that new tax cuts and spending programs be offset with spending cuts or tax increases.
Baucus is a proponent of full repeal of the alternative minimum tax, and introduced legislation earlier this year to do so. "Protecting working families from the alternative minimum tax is one of my top tax priorities this year. The legislation the Senate has now passed will keep millions of Americans from falling victim this year to a tax they were never meant to pay. And it remains my goal to repeal AMT altogether," said Baucus after passage of the bill. "I'm disappointed that the votes weren't there to pay for this bill, but I'm not sorry for choosing to protect taxpayers from the AMT even at some cost. Too many folks are at risk of an unfair tax increase if Congress fails to act on the AMT. Now I plan to work with the House to end this drawn-out process on the AMT, and to get this tax relief signed into law as quickly as possible."