[Congressional Record Volume 151, Number 69 (Monday, May 23, 2005)]
[Senate]
[Pages S5787-S5788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Grassley, Mr. Wyden, Mr. Kyl, Mr. 
        Schumer, Mr. Crapo, Mr. Pryor, Mr. Jeffords, and Mr. Frist):
  S. 1103. A bill to amend the Internal Revenue Code of 1986 to repeal 
the individual alternative minimum tax; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, this weekend, millions of Americans 
watched in suspense as Anakin Skywalker was lured to the Dark side and 
became Darth Vader. What millions of those same Americans may not be 
aware of is another Darth Vader lurking in our tax code; that is, the 
Alternative Minimum Tax, or AMT.
  The AMT has many of the same qualities as Anakin Skywalker. The AMT 
was supposed to bring order and fairness to the tax world, but it 
eventually got off on the wrong path and became a threat to middle-
income taxpayers. Both Skywalker and the AMT started off with great 
intentions, but eventually they went astray. And now we have the Darth 
Vader of the Tax Code bearing down on millions of unsuspecting 
families.

[[Page S5788]]

  That is why I am pleased to join with my friend and Chairman Chuck 
Grassley, and our fellow committee colleagues, Senators Wyden and Kyl, 
to introduce legislation today that will repeal the individual AMT. Our 
bill simply says that individuals beginning January 1, 2006 will owe 
zero, I repeat, zero dollars under the AMT. Further, our bill provides 
that individuals with AMT credits can continue to use those up to 90 
percent of their regular tax liability.
  If we do not act, CRS estimates that in 2006, the family-unfriendly 
AMT will hit middle-income families earning $63,000 with three 
children. What was once meant to ensure that a handful of millionaires 
did not eliminate all taxes through excessive deductions is now meaning 
millions of working families, including thousands in my home State of 
Montana, are subject to a higher stealth tax. It is truly bizarre, Mr. 
Chairman, that we have designed a tax deeming more children ``excessive 
deductions'' and duly paying your State taxes a bad thing. Already, 
5,000 Montana families pay a higher tax because of the AMT. But this 
number could multiply many times over if we do not act soon.
  Not only is the AMT unfair and poorly targeted, it is an awful mess 
to figure out. The Finance Committee heard testimony today from our 
National Taxpayer Advocate, who has singled out this item as causing 
the most complexity for individual taxpayers, and also from a tax 
practitioner who has seen first-hand how difficult this is for her 
clients. We heard also from other witnesses who said it is time for 
repeal of the AMT.
  Of course, repeal does not come without cost and that cost is 
significant even if we assume the 2001 and 2003 tax cuts are not 
extended. We are committed to working together to identify reasonable 
offsets. Certainly, I do not think we want a tax system unfairly 
placing a higher tax burden on millions of middle-income families with 
children. But it does not serve those families either if our budget 
deficit is significantly worse.
  Again, I look forward to working with my colleagues on this AMT 
repeal bill will put an end to the Darth Vader of the tax code, without 
any sequels.
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