[Congressional Record Volume 145, Number 90 (Wednesday, June 23, 1999)]
[Extensions of Remarks]
[Page E1383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                     ALTERNATIVE MINIMUM TAX REFORM

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                           HON. J.D. HAYWORTH

                               of arizona

                    in the house of representatives

                        Wednesday, June 23, 1999

  Mr. HAYWORTH. Mr. Speaker, today I am introducing legislation that 
will reform the alternative minimum tax (AMT) and mitigate its 
devastating impact on America's industries. My bill, which would help 
all types of businesses that are locked in the AMT, has attracted the 
support of firms in the mining, steel, oil and gas, paper, coal, 
building, and printing industries, among others.
  The corporate AMT was conceived as a way ot ensuring that companies 
with economic income also paid some income tax. Unfortunately, the AMT 
has a perverse effect on companies that make large capital investments 
in plants and equipment but suffer from low prices for their output. 
Frequently, these businesses make commodity products that have small 
profit margins and are subject to intense international competition. 
Start-up businesses and rapidly growing companies whose profit margins 
may be slim in relation to their investment are also affected by the 
AMT. Extractive industries are another example of those locked into the 
AMT. And companies in a loss position must routinely borrow money to 
pay their AMT, even though they have no economic income.
  Once in the AMT, a corporation often has problems getting back into 
the ``regular tax'' and then using up the AMT credits accumulated 
during its time in the AMT. My legislation aims to end this vicious 
cycle by allowing companies that have AMT credits that are more than 
three years old to use their AMT credits to offset up to 50 percent of 
their tentative minimum tax. For firms that are currently of of the AMT 
but carry AMT credit balances, the bill would increase the amount of 
credits they are able to use currently, Finally, for companies in an 
AMT loss position in the current and two prior years, the bill would 
permit a 10-year AMT loss carryback.
  As Congress moves forward on tax relief legislation, it is imperative 
that we keep in mind the fiscal problems of our nation's basic 
industries. AMT relief is crtical for long-term AMT taxpayers, and I 
urge my colleagues to join in this important and timely effort.

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