Alternative Minimum Tax Relief Act of 2008
Floor Speech
Mr. NEAL of Massachusetts. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 7005) to amend the Internal Revenue Code of 1986 to provide alternative minimum tax relief for individuals for 2008.
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Mr. NEAL of Massachusetts. Madam Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and to insert extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Massachusetts?
There was no objection.
Mr. NEAL of Massachusetts. Madam Speaker, I yield myself such time as I may consume.
The provisions of H.R. 7005, the Alternative Minimum Tax Relief Act of 2008, as scheduled for floor action today, provides alternative minimum tax relief.
Ways and Means Committee Chairman Rangel and the ranking member, Mr. McCrery, have asked the nonpartisan Joint Committee on Taxation to make available to the public a technical explanation of the bill. The technical explanation expresses the committee's understanding and legislative intent behind this important legislation. It is available on the joint committee's Web site at www.jct.gov.
I want to thank Mr. Rangel for his diligent work on a flurry of last minute bills here. There is some urgency to the bill we are debating today. I also want to acknowledge, to his everlasting relief, that this is the last time Mr. Reynolds will have a chance to speak on the issue of the alternative minimum tax.
If we do not pass this legislation today, 25 million families will pay higher taxes this year. That is right, this tax relief is for this year. I might add to this conversation that one of the nice things about this bill, despite how tumultuous these days have been for Members of Congress and for the American citizens watching what has happened to their 401(k) plans, this legislation actually provides middle class tax relief. The current patch expired at the end of the last year, and it is urgent that we pass this relief now.
Of those 25 million families facing higher taxes, 84 percent of them earn less than $200,000. In my constituency alone, families paying alternative minimum tax will rise from 8,000 to 69,000 if we do not enact this patch, and only 500 of those unlucky 69,000 people earn more than half a million dollars annually. Clearly, the alternative minimum tax is not the millionaire's tax it was designed to be.
For the last decade I have sought to repeal or radically reform the AMT because of the unfairness it wreaks on our progressive tax system. The AMT patch we are considering today costs more than $60 billion, and a reminder to all, next year, $70 billion. But unlike the version we considered earlier this year, we should acknowledge, this one is not offset. Despite partisan efforts in outreach to the other side on the issue of fiscal responsibility, we have, unfortunately, been unable to find common ground. We have run up against the reality of the closing days of Congress, and this legislation simply must be accomplished.
Again, I want to congratulate Chairman Rangel on crafting a responsible bill and one which picks up on the good work of our colleagues, Mr. Van Hollen of Maryland and Mr. Johnson of Texas, on the issue of incentive stock options. For a decade, Mr. Johnson and I have tried to find relief for those taxpayers unfortunately caught with a massive AMT bill on phantom stock gains, and today's bill provides relief by abating penalties and interest on underpayments and by allowing quicker recovery of AMT credits.
The bill we are considering today is a true hold-harmless patch because it not only extends but increases the AMT exemption level. It also extends protection from AMT for taxpayers with personal, nonrefundable credits, such as education credits and the dependent care credits. Otherwise, taxpayers might lose these essential credits to AMT.
I urge adoption of this bill, Madam Speaker.
Madam Speaker, I reserve the balance of my time.
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Mr. NEAL of Massachusetts. Madam Speaker, I appreciate my friend, Mr. Dreier's, comments, about the alternative minimum tax and how we are going to proceed today, but, let me be blunt, over my objections for the last 8 years, what we talked about today is simply this for the American people that might be viewing this discussion, we are going to borrow the money. I object to it, but I have tried time and again to find concurrence on the other side with a common way forward and have been unsuccessful.
Madam Speaker, I would like to yield 2 minutes to the gentlelady from Nevada, a very valued member of the Ways and Means Committee, Ms. Berkley.
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Mr. NEAL of Massachusetts. Madam Speaker, I want to agree with some of what Mr. Reynolds said, but I also want to remind the American citizenry today, we have now borrowed hundreds of billions of dollars to fix the alternative minimum tax, only to discover that a temporary patch is hardly a fix.
Think of what we might have done had we adhered to some fiscal rectitude and actually paid for this legislation as opposed to borrowing the money.
The reality is, in a legislative body, that there are some days that you can't get the votes to do what you would like, and this is one of those days.
But be mindful as we proceed to the next session of the Congress that the request for fixing the alternative minimum tax, or patching the alternative minimum tax, you will be out $70 billion, the following year $80 billion, maybe more. Then when you calculate the interest that attends to the issue, we quickly find that we will be at $500 billion to have temporarily patched alternative minimum tax, when we have offered a remedy here to do away with it?
We can argue about percentage of GDP that results in taxation to administer the Federal Government. I have heard that argument. The difficulty with that argument is that it doesn't take into consideration the reality of what we might have done in the intervening time to address the issue.
We have put very thoughtful pieces of legislation to permanently repeal it, to put it behind us once and for all, alternative minimum tax, only to discover that we have had difficulty securing the necessary cooperation to get it done. So, I will be standing here next year, talking about alternative minimum tax, asking for a permanent repeal. I hope, in the atmosphere of tax reform, that we might accomplish that task.
Madam Speaker, I would like to yield 2 minutes to the gentleman from New York, a classmate of mine from 1988, my friend, Mr. Engel.
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Mr. NEAL of Massachusetts. Madam Speaker, let me, as I close, acknowledge the work of Chairman Rangel. He has given me considerable latitude not only on this issue but on a range of other issues within the jurisdiction of the committee. We have come up with some pretty good pieces of legislation during the last couple of years.
What is striking about this debate is we find ourselves in the same predicament where we will once again convene next year to discuss it. Mr. Rangel's legislation that I helped to author actually repealed the alternative minimum tax and did it in a responsible manner. The fact that we are here today because we couldn't find enough numbers in the House to move forward on the proposal, I think, demonstrates the frustration that we all feel with what has now become a very onerous position for the Congress to entertain.
But I do want to thank my friend, TOM REYNOLDS. And he is my friend. We probably on tax policy disagree on where the sun rises and the sun sets, but it is an example of a friendship that has been able to supersede any of those differences because after the debate of this House is over, socially he has been a good pal for a long time. And I have the impression that he is not going to miss debating alternative minimum tax when he is back in New York. His position has been steadfast in this arena on the issue of AMT, and we have really worked hand in glove with one minor difference: I think rather than borrow the money, I think we should pay for it. And at the same time, I must tell you, he has been a good and humorous friend along the way, and we will miss his presence in the House and on the Ways and Means Committee.
Madam Speaker, I urge adoption of the resolution.
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