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Congressman Barrett Votes to Prevent AMT Tax Increase

Wednesday December 19, 2007

WASHINGTON, D.C. – Congressman Gresham Barrett (SC, 03) today voted in favor of a bill to “patch” the Alternative Minimum Tax (AMT). The Senate Amendment to H.R. 3996- the Temporary Tax Relief Act of 2007, passed the House today and will protect 23 million additional taxpayers from burdening tax increases due to the AMT.

“By passing this legislation we prevented 23 million Americans from receiving a massive tax increase. While the vote today is a victory for American taxpayers there is still work to be done when it comes to lessening the tax burdens we place on middle class individuals and families,” said Congressman Barrett. “For our economy to grow, Americans need to have more money in their pockets to save and re-invest as they see fit and for that to happen it is important we continue to lower taxes and extend the tax relief given to millions of Americans.”

The AMT was first passed in 1969 and was originally aimed for only a minimum amount of the highest-income taxpayers, roughly 155 very wealthy families. The number of individuals affected by the AMT has since skyrocketed, increasing to 16 times the amount of taxpayers affected since 2003. The AMT rates and exemptions have never been properly indexed for inflation and resulted in a greater number of middle-income earners becoming subject to the AMT. In 2006 it applied to roughly 4.2 million taxpayers and was projected to affect over 23 million in 2007 unless addressed by Congress.

Congress last enacted an AMT “patch” as part of the Tax Increase Prevention and Reconciliation Act of 2005 which extended the fix through 2006. The Senate amendment to H.R. 3996 removed the tax increase shielding nearly 23 million taxpayers from being hit by $50 billion in higher taxes due to the AMT.

The bill passed would extend for one year AMT relief for nonrefundable personal credits and increases the AMT exemption amount to $66,250 for joint filers and $44,350 for individuals. The total is estimated to cost $50.59 billion over 10 years.

Congressman Barrett supports a complete repeal of the individual AMT to avoid increasing taxes to pay for a patch and is a cosponsor for H.R. 3818, the Taxpayer Choice Act. H.R. 3818 would prevent automatic tax increases by immediately and completely repealing the AMT, make permanent the current tax rates on capital gains and dividends, and give taxpayers the option of paying their income taxes under a massively simplified tax system with lower rates and no special deductions.

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