Senators Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, introduced legislation on the first day of the 110th Congress to repeal the individual alternative minimum tax beginning in the 2007 tax year.It’s just the most recent attempt the men have made to get the legislation passed. Congress has taken to patching the AMT one year at a time -- six years in a row -- usually by increasing the exemption amount. According to the Joint Committee on Taxation, in 2007 the patch will cost about $50 billion and hold the number of affected taxpayers at close to the 4 million taxpayers affected this year. Without a patch, about 23 million households would have been affected by the AMT.
Baucus, the new chairman of the Senate Finance Committee, described the bill as a bellwether for one of the committee's biggest priorities, providing tax relief to middle-income American.
Grassley said that the tax has long outlived its usefulness. “I hope the new congressional leaders don't fall into traps on AMT repeal,” he said in a statement. “One is counting on the revenue that the AMT raises for more government spending. It's ridiculous to rely on revenue that was never supposed to be collected in the first place. Another trap is raising taxes to 'pay' for AMT repeal. It's unfair to raise taxes to repeal something with serious unintended consequences like the AMT."
Last year, a bipartisan Senate bill with 21 co-sponsors was introduced to repeal the tax, but ultimately failed.
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