AMT Patch (Congress, regime, lobbyists, lobby)

[bily4]

Thank goodness... Congress patched the AMT tax so that upper/ middle class families will not get hit with thousands more in taxes. From this article it seems like the Democratic "Blue Dogs" were trying to be fiscally responsible by making up for the revenues lost through the patch with new taxes on hedge fund and private equity managers or by closing down off-shore tax havens by hedge managers, but their proposals were rejected by the Senate.

Anybody with more knowledge of this topic that can provide more info/opinions?



Democrats had promised all year not just to fix the AMT, but also to pay for revenue losses connected to the change. As part of their pay-as-you-go regimen, Democrats pledged to make up the patch's $50 billion loss by raising taxes or cutting spending. In the end, they did neither.

Many lawmakers, especially Democrats, bemoaned the failure. For several days, moderate House Democrats who call themselves Blue Dogs threatened to prevent Congress from acting unless the AMT patch was fully paid for. But they relented after the Senate for the second time rejected a House-passed AMT patch that would have been paid for by tax increases on Wall Street financiers.

On Tuesday, the Senate rejected a House-passed AMT patch that would have covered its cost by closing down offshore tax havens used by hedge fund managers. The Senate earlier rejected a House plan that would have increased the tax rate on managers of hedge funds and private-equity firms.

The Senate's refusal to accept the tax increases followed an extensive lobbying campaign that involved not just Wall Street firms, but also the real estate industry, whose managers would have also had to pay a higher tax rate. Dozens of lobbyists were hired to pressure lawmakers and campaign donations were stepped up, especially from Wall Street executives.

Had the patch not been approved, 81 percent of taxpayers with taxable incomes between $100,000 and $200,000 would have been hit by the AMT, according to the congressional Joint Committee on Taxation.


http://www.sfgate.com/cgi-bin/articl.../MNS7U1H9D.DTL

[saganista]

Originally Posted by bily4

Thank goodness... Congress patched the AMT tax so that upper/ middle class families will not get hit with thousands more in taxes. From this article it seems like the Democratic "Blue Dogs" were trying to be fiscally responsible by making up for the revenues lost through the patch with new taxes on hedge fund and private equity managers or by closing down off-shore tax havens by hedge managers, but their proposals were rejected by the Senate. Anybody with more knowledge of this topic that can provide more info/opinions?

Well, maybe a little more. Basically, this was a battle between House Democrats and Senate Republicans. The former were insistent on paying for the AMT rollback. Closing some offshore tax-haven loopholes and increasing taxes on much of the income earned by venture capitalists and hedge fund managers would have done the job. But the Republicans weren't hearing of it and ran another filibuster. They only had 46 votes to keep the offsets out of the legislation, but these days, all you need is 41, so that's another $50 billion you can toss onto the pile of the public debt. And of course, they'll have to do it all over again next year.

As for the AMT itself, you don't want to go there. Not only do you pay more, the paperwork is at least triple in volume and much more complex than what you do to fill out an ordinary 1040. You can always download Form 6251 to see what's up. But don't forget the handy 10-page set of instructions and sub-worksheets...

[bily4]

thanks sag...

I guess I am missing the part where closing off-shore tax haven loopholes for hedge fund managers as a substitute for the revenue lost by unfairly imposing an extra tax on middle class families is a bad thing.