Going into the 2008 Presidential election year, Congress has a number of important issues to face, among them addressing the Alternative Minimum Tax (AMT) and the estate tax, and 401(k) fee disclosure. The way it’s shaping up now, Washington insiders say actions will be taken in all three areas.
Thirty million Americans would be saved from the Alternative Minimum Tax (AMT) under a bill that was introduced by House Republicans October 11. The bill, The Taxpayer Choice Act, would repeal the AMT and give taxpayers a choice of how they wish to pay federal income taxes: under the current tax code or through a “simplified tax.” The sponsors of the bill are Representatives John Campbell (R-California), Jeb Hensarling (R-Texas), and Paul Ryan (R-Wisconsin).
The simplified tax would use two income tax rates: a 10% rate on taxable income of $100,000 for joint filers and $50,000 for single filers, and a 25% rate for income above $100,000, says Tim Flynn, a House Budget Committee staffer. The current tax code uses six tax rates, so two rates is an attempt to “clean up” the tax system and make it easier–and less costly–for individuals to prepare their taxes, Flynn says.