[Congressional Record Volume 143, Number 134 (Wednesday, October 1, 1997)]
[Senate]
[Page S10293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERREY:
  S. 1242. A bill to amend the Internal Revenue Code of 1986 to allow 
the nonrefundable personal credits, the standard deduction, and the 
deduction for personal exemptions in determining alternative minimum 
tax liability; to the Committee on Finance.


             alternative minimum tax liability legislation

  Mr. KERREY. Mr. President, I am introducing legislation today to 
ensure that families are not denied the tax relief we promised them 
under the Taxpayer Relief Act of 1997.
  What we promised under the Taxpayer Relief Act was a child credit to 
help families raise their kids and an education credit to help make 
higher education more affordable. As it turns out, the reality may be 
far different. What we may be doing is throwing middle-class families 
into the alternative minimum tax [AMT] simply because they take 
advantage of the new child and education credits. This will happen 
because under current law, individuals pay the greater of their regular 
tax owed minus nonrefundable tax credits or the AMT which cannot be 
reduced by these nonrefundable credits.
  Under current law, the child credit and the education credit won't be 
allowed under the AMT. As a result, average-sized families with 
children are more likely to be thrown into the AMT simply by using 
these credits. Believe me, this is not the place we want to be sending 
them.
  The bill I am introducing today is identical to one that was 
introduced last week by Congresswoman Kennelly of Connecticut. By her 
calculations, in 2002, a full 2 million families will be in the AMT 
because of the family credit alone. For illustrative purposes, I will 
give you just one example of the kinds of people who will get hurt: A 
two-parent family with a gross income of $67,700 and three children, 
including one in college, would fall into the AMT and lose nearly 
$1,500 of the $2,500 in combined child and education credits that we 
promised them.
  The legislation I am introducing today is simple. It would allow 
taxpayers to take the nonrefundable personal credits--the dependent 
care credit, the child credit, and the education credit under the AMT. 
It would also make the standard deduction and the personal exemptions 
deductible under the AMT.
  As Congresswoman Kennelly has noted, ``The AMT was meant to ensure 
that sophisticated taxpayers couldn't zero out their taxes. It was 
never intended that your children would throw you into the AMT.'' We 
need to deliver on the family tax relief promises we made in the 
Taxpayer Relief Act. I urge my colleagues to join me in support of this 
legislation.
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