[Congressional Record Volume 150, Number 68 (Friday, May 14, 2004)]
[Extensions of Remarks]
[Pages E868-E869]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        MIDDLE-CLASS ALTERNATIVE MINIMUM TAX RELIEF ACT OF 2004

                                 ______
                                 

                               speech of

                          HON. BETTY McCOLLUM

                              of minnesota

                    in the house of representatives

                         Wednesday, May 5, 2004

  Ms. McCOLLUM. Mr. Speaker, I rise today on behalf of the more than 2 
million taxpayers who are unfairly burdened by the alternative minimum 
tax.
  The AMT was originally designed in 1969 to ensure that the wealthiest 
Americans would still pay a fair share of taxes. The AMT now burdens 
many middle income Americans in what was once envisioned as an 
alternative minimum tax has now become more of a mandatory maximum tax.
  The AMT is not a technicality of significance to only a few 
bureaucrats and the tax lawyers. It is not a mere glitch, the repair of 
which would only help a handful of wealthy individuals. It is a system 
that affects 2.4 million families this year. By 2010, 30 million 
Anrencans will be faced with minimum tax liability.
  Unfortunately, under the Republican bill today, AMT exemption would 
only be raised to

[[Page E869]]

$40,250 for single taxpayers and $58,000 for married couple filing 
jointly in 2005. This would still leave 1 million families paying the 
AMT. Unlike other tax cuts being forced through by Republicans, this 
will only be a temporary 1-year fix. The Congressional Budget Office 
estimates that a true fix of the AMT would cost $376 billion over 10 
years. But Republicans have refused to pull back their tax cuts for the 
wealthy, which have created a $3 trillion deficit, in order to pay for 
this essential middle class tax relief.
  I ask unanimous consent to insert into the record an editorial from 
the May 10, 2004 Los Angeles Times highlighting the budget gimmicks 
being used to disguise the cost of AMT and other tax cuts.
  Today Democrats bring to the House floor a true solution to the AMT 
problem. The Democratic substitute completely exempts married couple 
families with incomes under $250,000 from the alternative minimum tax, 
providing tax relief to more than 10 million families.
  The Democratic plan is fully paid for by cracking down on corporate 
tax shelters. Nearly two-thirds of corporations paid no tax at all in 
2000 and this is an important step to ensuring that corporations pay 
their fair share while relieving middle class families from the unfair 
burden of the alternative minimum tax.
  It is important that we act today to ensure average income Americans 
will not unfairly face the alternative minimum tax in 2005. However, I 
believe we should provide this relief in a fiscally responsible manner 
that will not burden future generations of Americans. I urge my 
colleagues in joining me today in support of real AMT relief.

               [From the Los Angeles Times, May 10, 2004]

                      Presto!--It's Deficit Magic

       Federal Reserve Chairman Alan Greenspan is increasingly 
     testy about the perils of the federal budget deficit, warning 
     Congress and the Bush administration last week that it poses 
     ``a significant obstacle to long-term stability.'' The higher 
     the debt goes, the more the threat of inflation increases. 
     That forces the Federal Reserve to raise interest rates, 
     slowing economic growth. Friday's sunny job creation figures, 
     though good news, also intensify pressure to raise rates.
       The Congressional Budget Office projects a deficit of $477 
     billion for 2004--and by 2013, a recent average college 
     graduate will shoulder $51,520 of the total national debt. 
     The new $25 billion request by the White House to underwrite 
     the Iraq occupation will be on top of those projections. But 
     Congress continues living in a fiscal house of mirrors, using 
     gimmickry to disguise the cost of current and proposed tax 
     cuts.
       The mischief begins with the one-year curb on the so-called 
     alternative minimum tax that the House approved Wednesday. If 
     enacted, it will shield about 9 million individuals and 
     families at a cost of $17.8 billion to the Treasury. The AMT 
     is a parallel tax system originally designed to prevent the 
     wealthy from avoiding all income taxes. But because it was 
     not indexed for inflation, middle-class taxpayers are falling 
     within its limits. Indexing the tax makes sense, but not on 
     top of the more reckless cuts already passed.
       Now Congress seeks to have it both ways by relying on one-
     year extensions. It pretends at budget time that hundreds of 
     billions of AMT dollars will be available over the next 
     decade. Then it can turn around and extend AMT relief for 
     another year.
       The ``marriage penalty'' produces another sleight of hand. 
     A tax code quirk often penalizes married couples when both 
     spouses work. Once again, relief is good in theory but 
     lawmakers aren't honest about lost revenue. By pretending the 
     AMT will be in effect, they assume for budgeting purposes 
     that about half of the tax cuts the AMT is intended to 
     provide for married couples will be canceled out. Dizzying as 
     well as deceptive.
       The congressional Joint Committee on Taxation estimates 
     that if, as is likely, the AMT is curbed each year, the bill 
     the House passed April 28 for marriage relief would cost $204 
     billion over 10 years, not $105 billion.
       If Congress rolled back the parts of the tax cuts that 
     benefit the most wealthy, changes to the AMT and marriage 
     penalty could be considered, but cuts already enacted reduce 
     federal taxes of households with incomes above $1 million an 
     average of $123,600 in 2004. Over the next decade, interest 
     payments on tax-cut debt will amount to all that the 
     government spends on the departments of Education, Homeland 
     Security, Interior, Justice and State.
       The longer that lawmakers budget by fakery, the more they 
     will inundate future generations with trillions in debt. Whom 
     will those generations blame?

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