Conference Report on H.R. 4297, Tax Increase Prevention and Reconciliation Act of 2005
CONFERENCE REPORT ON H.R. 4297, TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005 -- (House of Representatives - May 10, 2006)
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Mr. VAN HOLLEN. Mr. Speaker, I rise today to support providing much needed relief from the alternative minimum tax, but oppose those provisions providing special tax breaks for the wealthiest. I am disappointed that important legislation to help the American middle class is tied to an irresponsible tax giveaway to the wealthiest among us. The dividends tax break would help only 1 in 7 families making under $100,000 a year. The capital gains tax break affects only 1 in 20 such families. In a time of massive deficits, we should not be passing such unnecessary tax cuts. It is unfortunate that an important tax break--the AMT--is tied into this bill. While I support the AMT fix, I strongly object to the crass political ploy of attaching it to a tax break that disproportionately benefits the very wealthiest among us.
The original purpose of the AMT was to ensure that taxpayers with high incomes would not take advantage of loopholes in the tax code and pay little or no income tax. However, because the AMT is not adjusted for inflation, it will penalize middle income families. The IRS calls this tax the ``Number 1 most serious problem'' facing taxpayers. We must extend AMT relief to ensure that middle class families do not face the burden of this complicated and expensive tax. That is why I am encouraging my colleagues to vote for the Democratic substitute. The substitute would eliminate AMT liability for individuals whose income is less than $125,000 and for couples whose income is less than $250,000. It is simpler, broader relief, and we can pay for it by restricting tax shelters.
But an extension is only a temporary fix. We must amend the AMT to accomplish its original purpose rather than unfairly penalize millions of taxpayers. If we do not make serious changes, the AMT will affect nearly 35 million taxpayers in 2010. An extension is a good first step, but we should continue to work on policies to make the tax structure sensible and fair.
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