While the nation’s attention was turned to the financial bank crisis, the House passed a bill increasing the exemption level for the alternative minimum tax (AMT) to $46,200 for individuals and $69,950 for married couples filing jointly. The motion passed by a margin of 393-30. The bill provides about $2,000 of relief each to affected taxpayers.
What does it mean? Perhaps nothing. Earlier this year, the House tried to pass AMT relief but the White House threatened to veto the bill. The threat was meaningless since the bill didn’t pass the Senate. One reason it didn’t pass? The $61 billion price tag which somehow seemed important earlier this year.
Interestingly, the cost of the most recent bill for one year is estimated to be $70 billion. There is no revenue-raising component to the bill. And yet, Congress doesn’t seem bothered. After all, it’s just money, right? I guess $70 billion pales in comparison to the $1.3 trillion bailouts.
This legislation goes back to the Senate, which has already passed its own version. The Senate version of the bill includes disaster relief, an extension of business and individual tax breaks, and offering tax incentives for renewable energy investment (more on that in a future post).
Practically no one disagrees that AMT relief is needed on some level. But really, this is a mess. It’s another patch, folks. Congress just loves these AMT patches. God forbid that they pass anything that offers a real solution.
With everything going on, I see paid preparers are once again going to be working their &*%$ off.