[Congressional Record Volume 151, Number 156 (Wednesday, December 7, 2005)]
[House]
[Pages H11141-H11147]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     STEALTH TAX RELIEF ACT OF 2005

  Mr. REYNOLDS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4096) to amend the Internal Revenue Code of 1986 to extend 
to 2006 the alternative minimum tax relief available in 2005 and to 
index such relief for inflation.
  The Clerk read as follows:

                               H.R. 4096

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Stealth Tax Relief Act of 
     2005''.

     SEC. 2. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF TO 2006.

       (a) In General.--Subparagraphs (A) and (B) of section 
     55(d)(1) of the Internal Revenue Code of 1986 are each 
     amended by striking ``and 2005'' and inserting ``, 2005, and 
     2006''.
       (b) Inflation Adjustment.--Subsection (d) of section 55 of 
     such Code is amended by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Inflation adjustment.--
       ``(A) In general.--In the case of any taxable year 
     beginning in calendar year 2006, the $58,000 amount contained 
     in paragraph (1)(A) and the $40,250 amount contained in 
     paragraph (1)(B) shall each be increased by an amount equal 
     to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `2004' for `1992' in 
     subparagraph (B) thereof.
       ``(B) Rounding.--Any increase determined under subparagraph 
     (A) which is not a multiple of $50 shall be rounded to the 
     next lowest multiple of $50.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Reynolds) and the gentleman from New York (Mr. Rangel) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New York.


                             General Leave

  Mr. REYNOLDS. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous material on the subject of the bill 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it has been called the ``stealth tax,'' a ``ticking time 
bomb for the middle class,'' and even the ``Darth Vader of the Tax 
Code.'' It is the individual alternative minimum tax, the AMT, and it 
has middle class America squarely in its sights.
  Today, as we consider the Stealth Tax Relief Act of 2005 on the floor 
of the House, this body has a chance to stand with America's middle 
class by preventing an enormous, unnecessary tax increase from sneaking 
up on millions of unsuspecting taxpayers next year.
  As many of my colleagues know, the AMT was originally enacted in 1969 
to prevent a small percentage of taxpayers with very high incomes from 
paying little or no Federal income tax. However, because this stealth 
tax was never adjusted for inflation, it is now sneaking up on more and 
more middle class taxpayers each year as they climb the income ladder. 
Let me repeat: The AMT was never intended to hit the middle class, but 
now it is threatening millions of our middle class constituents.
  That threat is what prompted the President's Tax Reform Commission to 
recommit repealing the AMT entirely when it issued its report last 
month. And, certainly, any serious discussion of long-term tax reform 
and simplification must include a long, hard look at the AMT.
  Mr. Speaker, but middle-class taxpayers cannot afford to wait for the 
enactment of a permanent AMT relief. As many in this Chamber will 
recall, the temporary AMT relief that Congress has repeatedly enacted 
over the last several years is, once again, set to expire at the end of 
this month, only weeks away. Unless Congress extends this AMT relief, 
the stealth tax will claim many more middle-class victims.
  For perspective, here are some numbers so our viewers at home can 
follow along with the charts. According to the Joint Committee on 
Taxation, if Congress fails to act, the number of middle class AMT 
victims will rise from 3.6 million in 2005 to over 19 million in 2006. 
In other words, if we fail to act, some 15.4 million more taxpayers 
will get hit with this stealth tax next year. And according to the U.S. 
Treasury Department, these taxpayers will pay $2,736 more in taxes just 
because of individual AMT.
  The numbers from my home State of New York tell a similar story. 
According to the Manhattan Institute For Policy Research if we do 
nothing, the number of AMT taxpayers in New York will balloon from 
379,000 in 2005 to 1.6 million in 2006. That is unacceptable for the 
middle-class taxpayers I represent in western New York. It is 
unacceptable for taxpayers nationwide.
  Mr. Speaker, the bill before us today will simply extend for 1 
additional year the individual AMT relief that we most recently enacted 
just a year ago. Specifically, this legislation will ensure that the 
higher AMT exemptions amounts to $58,000 for joint filers and surviving 
spouses, and $40,250 for singles, that are applicable to tax year 2005, 
are extended to 2006 as well. This legislation also includes a modest 
inflation adjustment, which will ensure that the value of this much-
needed tax relief is not eaten away by inflation.
  If Congress fails to act on this legislation, these exemption amounts 
are scheduled to revert back to the 2000 levels next year, 45,000 for 
joint filers and 33,750 for singles, resulting in a massive tax 
increase on the middle class.
  I would note that the other body recently voted to provide a very 
similar AMT relief as part of its Tax Relief Act of 2005. I would hope 
that with a strong bipartisan vote here today, we will be able to work 
out with our colleagues on the other side of the Capitol to keep the 
stealth tax from being a middle-class nightmare.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. Members are reminded to address their 
remarks to the Chair and not to guests in the gallery or to individuals 
who may be watching through the television.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.

[[Page H11142]]

  I agree with my friend and the gentleman from New York that the 
alternative minimum tax was not created to put this undue burden on 
middle class income people. But I would like to suggest to him as a 
member of the awesome and powerful Committee on Ways and Means, and 
former member of the Committee on Rules, that suspension of the rules 
were not meant for bills like this.
  I think it takes a little bit of arrogance to put hundreds of 
billions of dollars of tax cuts on the suspension calendar, which does 
not give us an opportunity to see whether we can bring the relief that 
these taxpayers deserve in a more equitable way. It just seems to me 
that we had an opportunity to take care of this tax that for many, many 
years has been threatening the full fiscal load on taxpayers that it 
was not intended for, but somehow the leadership did not put this in 
the tax reconciliation bill. It did not include it with their bill to 
reduce corporate gains tax or the capital gains tax or the corporate 
dividends tax.
  Why would Republicans do something like this? Well, maybe it is 
because they do not really think the Senate is going to take it up. 
Maybe this is just a fig leaf for not having the courage to say that 
this thing is going to cost a trillion dollars if it is going to be 
permanently removed, and as of now, it is going to cost $33 billion.
  I think the American people ought to know that this is either going 
to cut deeper into the social programs that the very poor have had 
taken away from them, or it is going to increase the deficit by an 
additional $33 billion. In any event, I am more than confident that my 
able colleague from the State of New York and a part of the leadership 
of the majority party will make it abundantly clear to us that when we 
all vote for this, that not only have we got some guarantee that it is 
going to pass the Senate, but we will not cut any further into the $35 
billion that is in the real tax bill that came to the floor.
  So, Mr. Speaker, it is my impression that we are just going through 
this for political reasons. The Senate is not going to take it up. The 
deficit will be increased by $30 billion, but I would encourage my 
colleagues on both sides of the aisle to support this bill because it 
certainly has more merit. We never intended for these people to get 
caught in this, but somehow capital gains and corporate dividends have 
a higher priority and so this suspension bill will turn slowly in the 
wind, but I do not know how much support we expect to get from the 
President or from the majority leadership on this. But we shall see 
what we shall see.
  Mr. Speaker, I reserve the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  I stand looking across the way at the ranking member, and not only is 
he the senior member on the Committee on Ways and Means, but also the 
senior Member of Congress from my State. I listen carefully when he 
speaks.
  He does not want to see the AMT tax come onto the middle class. He 
does not really like the process. He is not really sure whether tax 
cuts are a good idea or not, but hopes that Members will support the 
legislation.
  When we look at some of my brief experience here on both the Rules 
Committee and now on Ways and Means, I just want to remind the 
gentleman that as I introduced this legislation with cosponsors, I am 
pleased to know that we are actually taking up this legislation ahead 
of the other tax legislation that has been before the Ways and Means 
Committee on this floor which I hope will be tomorrow or the next day, 
and I also look back to see that this extension, which has been done in 
previous years, is not a new issue for Members in the House.
  Everyone is familiar with the problem. It is essentially the same 
bill that passed overwhelmingly on May 5, 2004, with a vote of 333-89, 
unanimous on our side of the aisle, and 109 voted for it on the 
Democratic side of the aisle, and 89 against. I hoped there was not 
huge controversy with having the AMT legislation before us, and made 
sure there was ample time for debate on the floor by both sides of the 
aisle before we consider passage of the AMT.
  The one thing I have learned in my time here, I cannot predict what 
the other body will do, but I hope they will do the right thing, and 
that would be to pass this legislation so the stealth tax does not 
become a middle-class tax, adding more people to the burden of having 
to pay this.
  Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania 
(Mr. English) who is a distinguished member of the Committee on Ways 
and Means.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I am pleased to join my 
colleague from New York in strong support of the Stealth Tax Relief 
Act, a bill which ensures that the tax cuts that have allowed middle-
class families to keep more of their income over the past 4 years will 
not be undermined by the so-called alternative minimum tax.
  I am co-chairman of the Zero AMT Caucus. Our objective is to 
eventually repeal this tax. But for the moment, we are strongly 
supporting this bill.
  The evidence is overwhelming that the Republican tax cuts have helped 
families cope with economic uncertainties and played a significant role 
in stimulating the economic growth that has been in place since the 
2003 tax cuts, growth that continues today as we saw in this past 
quarter when GDP grew at a healthy 4.3 percent rate.
  Yet over this prospect, the AMT, which the other side when they 
could, never adjusted for inflation, hangs like a sword of Damocles, 
threatening to wipe out tax relief and incentives for growth currently 
in the Tax Code. If we do not move with this legislation, the AMT will 
suddenly fall on 11 million taxpayers, hitting them with an average tax 
increase of $1,520. If we do not act, married couples will see their 
AMT exemption snap back from $58,000 to $45,000, while single 
individuals will see their AMT exemption drop from $40,250 to $33,750. 
I use these figures to make clear to everyone, these are not wealthy 
people. These are middle-class Americans who would be slapped with a 
very steep tax increase that they would not know about until tax day 
when they learned that the tax exemptions that they thought they could 
take, the same tax exemptions we intended them to take, would no longer 
apply.

                              {time}  1300

  This legislation comes at a critical time. As we begin to examine 
options for fundamental tax reform that will promote economic growth 
long term in our country, we need to extend AMT relief for this coming 
year and ensure that the middle class is not facing a tax increase. 
This will buy us time to truly reform the AMT and I hope eventually to 
repeal this perverse and complicated tax provision. I hope the other 
side will set aside their sterile arguments about distributional 
effects and eschew populace poses. We have already seen some rhetoric 
on the floor about fig leaves and tax cuts. This is not a tax cut. This 
legislation provides an avoidance of a tax increase, a tax increase 
that the other side could have fixed when they were in the majority and 
never did. We need to step up to the plate and make sure that this 
mistake does not happen, that this tax increase does not fall on the 
American people at this very critical time.
  Mr. RANGEL. Mr. Speaker, I yield 4 minutes to the gentleman from 
Michigan (Mr. Levin), a very distinguished member of the Ways and Means 
Committee.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. This is a stealth approach, this so-called Stealth Tax 
Relief Act, to a real problem. The two gentlemen who have spoken had a 
choice in the committee. You had a choice. You had a choice between 
helping out with a tax cut a few years from now with more than 50 
percent going to 1 percent of the population, or voting to help those 
15\1/2\ million Americans who would otherwise have a tax increase. You 
voted for the 1 percent.
  You had a choice in committee between helping out some years from now 
people making a million dollars a year, or helping next year millions 
of families making 75,000 to $100,000. You chose the millionaires. So 
now you are coming here and saying, well, we must do something. You had 
a chance to do that in committee. You did the wrong thing then, and now 
you are trying to cover your tracks. You do not pay for it. There is 
little chance the Senate will act, and so essentially this is an effort 
to cover your tracks.

[[Page H11143]]

  But let me just suggest, you can try to hide from what you did in 
committee and what is in the reconciliation tax bill, but you cannot 
run on it next year. So now you are trying to put up something that 
gives you cover for next year's election.
  Look, when you say we could have done something in the majority, I 
think we have been in the minority now for 11 years. Where have you 
been?
  No, instead, you have adopted tax policies that, by and large, surely 
in the provision in the tax bill, the reconciliation bill, help the 
very wealthy instead of helping the families, millions who will be 
caught up by the increased coverage of the alternative minimum tax. And 
I do not have to go through with this. You have described these 
families. But essentially it is crocodile tears for them instead of 
real action. You made your choice.
  Tomorrow, you are going to have a chance to make the choice again 
when we put up a substitute, or if you do not allow that, a motion to 
recommit. So essentially what you are going to do is to vote ``yes'' 
today; and when we bring up the substitute or the motion to recommit, 
you are going to vote ``no.'' So ``yes'' today and ``no'' tomorrow. 
That is not even a fig leaf. That is total inconsistency.
  We proposed in the committee, we proposed dealing with the minimum 
tax now. You passed a bill that said no, you want to give the majority 
of tax relief that was not paid for, the 20 billion, to people making 
over a million dollars a year. That is undeniable.
  My suggestion is that you, instead of passing the reconciliation bill 
that helps the millionaires and ignores the millions of families making 
75,000 bucks or more a year who will be affected by the minimum tax, 
that you go back and do it the right way and not hope that somehow this 
stealth bill will cover your tracks.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this bill that we have before us today will simply 
extend for one additional year the individual AMT relief that we most 
recently enacted just a year ago. Specifically, this legislation will 
ensure that higher AMT exemptions, now, hear these figures: they are 
not millionaires. They are not even people making over $100,000 a year. 
These are exemption amounts, $58,000 for joint filers and surviving 
spouses and $40,250 for singles that are applicable to the tax year 
2005 and extended now to 2006 if we have the good fortune of passing it 
here today.
  When I look at the aspect of this legislation, it is simply a stealth 
tax, raiding and invading middle-class America. This will have an 
opportunity to thwart that so that some 16.5 million Americans do not 
find themselves having to pay the stealth tax.
  Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida 
(Mr. Foley), who is also a distinguished member of the Committee on 
Ways and Means.
  Mr. FOLEY. Mr. Speaker, let me thank the gentleman from New York (Mr. 
Reynolds) for bringing this timely and important issue to the floor. I 
also want to give credit to the gentleman from Massachusetts (Mr. 
Neal), who has been a long champion of trying to correct this inequity. 
We have been working in a bipartisan fashion to find a solution to this 
problem. We have heard repeatedly about tax cuts for the rich. During 
one of our hearings, I happened to ask the panel, what is considered 
middle class in your community? To his credit, the gentleman from Ohio 
(Mr. Kucinich) said, well, it depends on where you live. And that was a 
very true answer, because if you live in a high-cost community like 
Manhattan, or Chicago or Los Angeles, or West Palm Beach, your middle 
class may be a lot different than somebody from rural America.
  What the gentleman from New York (Mr. Reynolds) attempts to do, 
though, is deal with the people that really, truly are working on the 
margins. The AMT will actually hit married couples. It will reduce from 
$58,000 for married couples to $45,000. They would be impacted by the 
AMT.
  The gentleman from New York (Mr. Rangel) clearly stated, and I credit 
him for this comment, We never expected these people to get caught up 
in this thing, the AMT. For single individuals, we drop from $40,000 to 
$33,750: $33,750 is the starting salary for a first-year teacher in the 
Palm Beach County school system. Actually, they are probably at about 
$37,000. So a person recently graduating from college coming to work to 
teach our children will more than likely fall victim to the AMT if we 
do not extend it for another year as we continue to work this solution 
and situation.
  There are two parallel tax systems under current law: the regular 
income tax and the AMT. The intention, I believe, when it was offered 
by the other side, was to capture the wealthy who take advantage of tax 
opportunities, whether they are deductions or what have you. This 
clarifies and allows hard-working Americans to escape this stealth tax. 
And I compliment the gentleman from Massachusetts (Mr. Neal) and others 
who on our committee have tried to find a solution to this vexing 
problem.
  It is about the average hard-working Americans who are getting caught 
in this trap, and simply extending it a year gives us a chance to 
thoughtfully and carefully consider options to alleviate this stealth 
tax. I want to again thank the gentleman from New York (Mr. Reynolds) 
who has worked tirelessly to bring this to the floor.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I want to congratulate the gentleman from Massachusetts (Mr. Neal) 
and the gentleman from Florida (Mr. Foley) for the fine work they have 
done for these people who got caught in this political fiscal trap. 
What the gentleman from New York, however, my colleague, does not know 
is that he is not answering the questions that we are asking. It is not 
that we do not support this bill. It is why did it not get the same 
protection as the capital gains bill or the same protection as the 
corporate dividends bill? Why do you have this bill turning slowly on 
the wind on the suspension calendar when you could have sent it to the 
Senate with protection?
  Mr. Speaker, I yield 4 minutes to the gentleman from Massachusetts 
(Mr. Neal), the person that was described by the gentleman from Florida 
(Mr. Foley) as his partner in a bipartisan way, a very distinguished 
member of the committee.
  Mr. NEAL of Massachusetts. Mr. Speaker, let me thank the gentleman 
from New York (Mr. Rangel) for allocating the time.
  The gentleman from New York (Mr. Reynolds) made some comments at the 
outset talking about in his time on the Ways and Means Committee he has 
seen the committee try to address the issue of alternative minimum tax. 
But what is really interesting is he has only been there a short period 
of time. For some of us who have been there for a long time, this is 
the annual request we make of the majority.
  Now, I want to thank the gentleman from Florida (Mr. Foley) for his 
good and sincere words. But there is a reality here, as we look at 
alternative minimum tax, and the reality is this: during the last 5 
years, we have had time to repeal the estate tax. We have had time to 
not only address the dividend issue and capital gains, but in the next 
few days, we are going to take up the issue of extending them for 
another 5 years.
  Now, Congress has had time during these 5 years to do all of this. We 
have cut taxes for the wealthiest among us, millionaires who have 
received annual breaks totaling well over hundreds of thousands of 
dollars. But then when it comes time to address alternative minimum 
tax, we do it in what is known as the Stealth Tax Relief Act. And you 
know what, Mr. Speaker? That is the right term, the Stealth Tax Relief 
Act, because stealth is what this issue is all about. There is no 
reality addressed to what Congress is going to do in the next hour or 
so when it passes this bill. Is there anybody here in the Congress who 
is not in favor of this? I am not aware of anybody. We are all going to 
vote for this, and then reality is going to settle in.
  And the reality is that this really does not mean very much. And, in 
fact, the gentleman from Florida (Mr. Foley) and the gentleman from New 
York (Mr. Reynolds) and the gentleman from New York (Mr. Rangel) and I 
are going to be back here next year, and we are going to be having this 
conversation. And the majority is going to say something like, well, 
the minority had years to do something about this. Who has been in 
charge of

[[Page H11144]]

this institution for more than a decade? The problem is this does not 
square, the alternative minimum tax because it gives tax relief to 
middle-income Americans, it does not square with the overarching agenda 
here, and that is to take care of the strongest among us. That is to 
take care of people who really are minimally touched by alternative 
minimum tax.
  They address this issue, as they do year after year, with a Band-Aid, 
with a Band-Aid. This issue, alternative minimum tax, requires major 
surgery. In fact, if they do not do something about it shortly, it is 
going to require a surgical air strike. That is how serious it has 
become. And my friends on the other side will say to me when we leave 
this Chamber, great job. You did a great job of calling attention to 
this issue. And then I am going to say to them, well, when are we going 
to do something about it? And they will say to me, next year.
  Mr. REYNOLDS. Mr. Speaker, I certainly respect the gentleman from 
Massachusetts (Mr. Neal) and his contribution to both the Ways and 
Means Committee and this important legislation for a final fix, which I 
advocated that we do a final fix. Unfortunately, as I stand here today, 
with only weeks away, I have legislation to extend into next year the 
opportunity of having the AMT not move into taking almost 20 million 
Americans of middle-class tax. And I also will be interested in 
listening to the views of my colleague, Mr. Neal, on the floor of the 
Ways and Means Committee, and other aspects on his thoughts of the 
Mack-Breaux solution, if that is in fact a solution that he supports or 
would recommend to our body to look at in the future.

                              {time}  1315

  Mr. NEAL of Massachusetts. Mr. Speaker, will the gentleman yield?
  Mr. REYNOLDS. I yield to the gentleman from Massachusetts.
  Mr. NEAL of Massachusetts. Mr. Speaker, if the gentleman will recall, 
in committee I offered a substitute fully paid for and the majority 
rejected it on a party-line vote.
  Mr. REYNOLDS. I believe that solution that you had also contained tax 
increases that Members felt that they did not want to incur at this 
time.
  Mr. Speaker, I yield 2 minutes to the gentleman from Colorado (Mr. 
Beauprez), another distinguished member of the Ways and Means 
Committee.
  Mr. BEAUPREZ. Mr. Speaker, I thank the gentleman from New York (Mr. 
Reynolds) for yielding me this time and especially for bringing this 
legislation to the floor.
  I am sure that people who are watching this debate from home are 
absolutely perplexed as to why an idea that has received pledges of 
support from both sides of the aisle has deteriorated into such a 
partisan conflict, and I expect folks back home are, again, perplexed 
by that. I think we have had at least two Members from the other side 
that were here when this alternative minimum tax was given birth, and 
it touched very few people and I think with a very clear intent, to 
strike at people that were somehow considered wealthy and somehow 
considered to be taking advantage, perhaps by some definition egregious 
advantage, of the allowances of the Tax Code.
  Let me tell you what I have found in my State not necessarily from 
the rich and the famous but from the very middle class and average, 
from farmers and ranchers, people in their garages and their machine 
shops, people that are running small businesses all over the State, 
laborers all over my State, along with the death tax, the one that 
comes up most frequently is the alternative minimum tax. What has not 
been said here today, and I again acknowledge the gentleman from New 
York who eloquently and accurately described how egregious this tax is 
and how it is invading every single worker, it seems like, in America, 
that if they already have not been hit, they fear that they soon will 
be, the cost of compliance with this tax.
  By some estimates, it costs 15 percent additional surtax over and 
above the tax people send in just to figure out what they owe us. With 
the alternative minimum tax, we tell people they have got to figure 
everything twice just to figure out how much, always the highest 
amount, they owe the Federal Government. There is another estimate out 
there that says it is almost a $1 trillion cost of compliance with 
Federal regulation.
  I urge the adoption of this legislation, and I thank the gentleman 
for bringing it to the floor.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy in 
yielding me this time.
  I am listening to my friend from Colorado saying that people back 
home may be confused when they listen to this debate. Well, I would 
suggest that they do not have to be confused at all. Listening to this 
debate and looking at the proposal that has been offered by the friends 
we have on the other side of the aisle reveals their true intentions 
and their true interest when it comes to tax justice in this country.
  The alternative minimum tax is the major tax reform issue of this 
decade, not 20 years ago, not 30 years ago, but this decade, when 
because of the interaction of the proposals that you have brought 
forward and the relentless pace of inflation, it has drug millions of 
Americans into a tax that was never, never, never intended to apply to 
them. But what we have seen, the Republican majority chooses instead to 
focus their time, their energy, and tax resources on other issues. The 
inheritance tax, which affects a few thousand families a year, you have 
lavished attention and mortgaged our future in terms of the dollars 
that it would mean.
  And what do you have to say about the alternative minimum tax? Well, 
every year you kick the can down the road, do it on the cheap, on the 
sly; not allowing, as my colleague, the distinguished ranking member of 
the Ways and Means Committee, had offered, for it to be brought 
forward, have a full debate, allow a clash of priorities and 
intentions.
  I am convinced that the majority of people in Congress believe the 
rhetoric that you are saying about the pernicious nature of this tax 
that taxes people because they have families, because they take 
advantage of some of the tax preferences, because they pay their 
property and income tax. If we had a free and honest debate and a 
chance to offer meaningful alternatives, we would scale it down, if not 
repeal it.
  But, unfortunately, our friends do not believe in their own rhetoric. 
They have other priorities. If they believed it, this would be the 
centerpiece; but instead they are extending taxes that do not even 
expire for years and benefit only a few.
  I am sad to say that what we are doing here is going through the 
motions. We are going through the motions even if somehow the Senate 
buys into this for a 1-year extension. We are keeping people in limbo. 
We are skewing our fiscal and tax policies. And we are subjecting hard-
working middle-class families who were never intended to be subjected 
to the minimum tax. They are going to suffer. I think it is shameful.
  I will vote for the extension because that is the best the Republican 
leadership is willing to do. But it is a sad day for this House, and it 
is a sad day for American families.
  Mr. REYNOLDS. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from California (Mr. Herger), senior member of the Ways and Means 
Committee.
  Mr. HERGER. Mr. Speaker, without today's legislation, the number of 
Americans ensnared by the alternative minimum tax is estimated to grow 
from 3 million now to an astounding 21 million in 2006. The problem is 
so great that the Treasury Department has estimated that by 2013 an AMT 
repeal would be more expensive than a repeal of the entire income tax.
  In my own Northern California congressional district, in one 
particular area, nearly 3,000 constituents face a significantly higher 
tax burden because of this onerous tax.
  In February of 1986, a levee broke on the Yuba River, causing a flood 
that submerged the community, resulting in millions of dollars in 
damage. Now, after nearly 20 years, the courts have found the State 
liable for damages to these victims in the amount of $428 million. 
Unfortunately, because individual claims have to add back attorney fees 
as AMT taxable income, the flood victims may end up paying some

[[Page H11145]]

form of tax on 100 percent of their award even though this is money 
they never saw. This is double taxation, and it is unfair.
  I urge my colleagues to vote for the Reynolds extension before us.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I just want to point out, since we all are singing the same song as 
to how these taxpayers were pushed by inflation into this difficult 
situation, the question that we are raising on the floor, to make it 
abundantly clear, is what are the Republicans' priorities for relief? 
We had an opportunity to have $70 billion to give relief. This problem 
has been gnawing at all of us to do the right and equitable thing. It 
was not included in the Republican reconciliation bill. In fact, it was 
rejected when offered in the full committee by the Democrats.
  So I can see the awkward political position that you find yourselves; 
and you know from the bottom of my heart, I sympathize with your 
political dilemma, not only in this area but in many other areas. But 
the question still remains, by putting it under the suspension calendar 
and sending it over to the other body, it does not have the same 
protection as the bill that you really want to make certain is there, 
and that is capital gains tax cuts and corporate dividends tax cuts.
  So all we are trying to say as the minority party is that we thought 
there was a better way to do it to protect these people, not to put it 
on the suspension calendar, which limits the debate, which restricts 
the Democrats in trying to improve upon it, but to put it on a road 
that could be a road to nowhere. There are no protections on this bill 
when it reaches the other body. And we really, truly believe that this 
is serious enough, and having this cloud over hardworking voters, you 
should have given it a priority rather than just to put it on the 
suspension calendar without the legislative process protection that you 
have given to other issues.
  Mr. Speaker, I reserve the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Florida (Mr. Shaw), a member of the Committee on Ways 
and Means.
  Mr. SHAW. Mr. Speaker, I rise in strong support of this bill and ask 
not only that we pass this bill by a large majority, which I believe we 
will, but also that we commit ourselves to doing away with the entire 
realm of the alternative minimum tax. I think of all the tax reform 
that is necessary for this body to focus on next year, the removal of 
the alternative minimum tax, the ``stealth tax,'' as has been quite 
correctly labeled here today, should be done away with. Even if we have 
to start folding the impact into the rates, we need to get rid of the 
alternative minimum tax.
  But I want to comment for a moment on the rhetoric we are hearing 
from the other side. They are scolding us. They are complaining, when 
this bill is a bill that they are going to support. Has this House come 
to that, that they cannot even agree with us when they agree with us?
  Come on, lighten up. Let's get together and work on things that we 
agree on.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, certainly we agree on the substance of the bill. But you 
do not have to blindfold the American people to say that you did not 
give it the same protection as you have given other tax priorities.
  Let's face it, the $56 billion tax cut bill that you are going to 
bring up later, we know how you pay for that. You pay for it by going 
after the most vulnerable people that we have in the United States by 
cutting these social services. The rest of it goes into the deficit. So 
why will somebody not have the courage to say where are we going to get 
the $33 billion for this? I am certain that Americans are prepared to 
make the sacrifice because, after all, this was an unintentional event 
by Republicans and Democrats, unintentional by liberals and 
conservatives. So we all agree with that.
  All I am saying to the distinguished member of the committee from 
Florida is that you know when we send this, it could be on the road to 
nowhere, not paid for. And unless you intend to ask the Senate to cut 
further in social services, it means that you have agreed on the 
concept, but you did not give it the same priority or the same 
legislative protection.
  And you say you would like to see it abolished forever. Well, I guess 
with your lack of respect for the deficit, another $1 trillion, we can 
do that. So bring it on. Include it with the war cause, which is $6 
billion a month. I mean, if there is no respect for anything, if we 
cannot work together as Republicans and Democrats and try to consider 
what our priorities are, but to come up in the middle of the night and 
say do I have a gimmick for you, we will put it on the suspension 
calendar, nobody is going to vote against it and whatever happens in 
the Senate happens, that is not the way we are supposed to legislate. 
Democrats and Republicans are supposed to work together and try to work 
out their differences before we send things over to the other body.
  There is not one Member on the other side of the aisle that can say 
that there is any way they are going to do both, their priority bill in 
terms of capital gains cuts, their cuts in corporate dividends, and 
this bill too, and fix it and put it into reconciliation.
  We did not put it into reconciliation. Why do you think that they are 
going to take your priority bill?
  Mr. SHAW. Mr. Speaker, will the gentleman yield?
  Mr. RANGEL. I yield to the gentleman from Florida.
  Mr. SHAW. Mr. Speaker, I would like to just tell the gentleman he is 
misinterpreting my remarks. I did not say just throw it into the 
deficit, because he knows and I know that doing away with the 
alternative minimum tax is a big revenue hit on the Federal Government 
and we are going to have to find a way to pay for that. We would have 
done this a long time ago if it was not such a huge figure.
  All I am doing is trying to reach out to you, who agree that the 
alternative minimum tax should be done away with permanently, and say 
let us work together and figure out a way to do it and do something. We 
used to do things in a bipartisan way. Why can we not do it again?

                              {time}  1330

  Mr. RANGEL. How many names do you want as to why we don't do it 
again? I can tell you why we don't. We on this side would welcome the 
opportunity. I don't think that the general public and the voters like 
to see us fighting each other.
  But there has not been one issue that the Republicans would allow us 
to work with them on. And further to that, even when you have your 
conferences, you know and I know Democrats are excluded from it. So if 
you and I were trying to work together, I am certain that we could.
  But you and I don't call the shots around here, Mr. Shaw, and that is 
unfortunate.
  Mr. REYNOLDS. Mr. Speaker, I yield 30 seconds to the gentlewoman from 
New York (Mrs. Kelly), who is a senior member of the Financial Services 
Committee, and no one has spent more time in battling this terrible 
stealth tax than Sue Kelly.
  (Mrs. KELLY asked and was given permission to revise and extend her 
remarks.)
  Mrs. KELLY. Mr. Speaker, I rise as a cosponsor of this legislation. 
It protects millions of middle class working families. In New York 
alone, if the middle class exemptions are not extended for 2006, the 
new taxpayers forced to pay the alternative minimum tax will more than 
quadruple to 1.6 million next year.
  The AMT is an atrocious burden for middle class families. We have got 
to send a message home that we are here to protect Americans. We must 
support this legislation against the stealth tax.
  Mr. Speaker, I rise as a cosponsor of this legislation to urge my 
colleagues to protect the millions of middle-class working families who 
stand to be penalized by the Alternative Minimum Tax if Congress does 
not act this year.
  The AMT (has been allowed to grow out of control) and if we don't 
pass this bill before the end of the year when middle-class exemption 
amounts will expire, it will attack middle-class families for whom the 
AMT was never intended.
  In New York alone, if middle-class exemptions are not extended for 
2006, the new taxpayers forced to pay the alternative minimum tax will 
more than quadruple to 1.6 million next year.

[[Page H11146]]

  Make no mistake about it, these are middle-class taxpayers--some 
earning less than $50,000--who are working to pay their bills and take 
care of themselves and their children.
  Now, they are faced with the possibility of having to pay thousands 
of dollars in additional Federal taxes to Washington. Mr. Speaker, this 
is unacceptable.
  The AMT has become an atrocious burden for middle-class families. We 
must send a message home that we are here to protect Americans from the 
unfair and unintended consequences of the Alternative Minimum Tax.
  Let's do the right thing for the middle class and pass the Stealth 
Tax Relief Act today, and I thank my friend, the gentleman from New 
York, Mr. Reynolds, for his leadership on this issue.
  Mr. REYNOLDS. Mr. Speaker, I yield myself the balance of the time.
  Mr. Speaker, the year 1969 saw examples of the best and worst of what 
the Federal Government can do. On one hand, the Department of Defense 
reachers invented the Internet, which has opened up a world of 
knowledge to anyone with access to a computer.
  On the other hand, in 1969, Congress controlled by the other side of 
the aisle, created the original version of the AMT. But while the 
Internet has continually evolved, the AMT structure has not.
  It has now become a stealth tax, sneaking up on unsuspecting middle 
class taxpayers. Mr. Speaker, many of us here today on both sides of 
the aisle would likely support AMT relief that goes far beyond what is 
included in this bill.
  But the legislation before us today is a crucial first step. I urge 
my colleagues to come together on a strong bipartisan basis to protect 
the middle class against stealth tax increases from the AMT.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise today in support of the 
Stealth Tax Relief Act. The AMT is not just a stealth tax, it is a 
sneaky tax. It is a parallel tax system where normal rules of income 
and deductions don't apply--you lose most of your deductions and your 
children become a liability!
  The bill we are debating today, the Stealth Tax Relief Act, will keep 
the AMT from hitting millions of additional middle class Americans. 
However, we are just holding back the tide of the AMT that in 2008 will 
swamp the tax system and actually collect more money than the 
underlying income tax system.
  We need to repeal the AMT. But until we can repeal it, we must hold 
harmless those Americans whose taxes are being raised in the next year.
  But even before we repeal the AMT we need to be sure that those 
Americans who have pre-paid future tax liability under AMT be able to 
use the pre-paid tax credits that they have accumulated. Unfortunately, 
there are thousands of Americans who have pre-paid future tax liability 
through the AMT but have never been able to use their credits. These 
credits amount to an interest free loan to the Federal government.
  Some Americans have been floating an interest free loan to the 
government for years and years. This is just plain wrong. To add insult 
to injury, many of these Americans have had to take out second 
mortgages on their homes and are paying interest on those loans to give 
the government an interest free loan! Some families raided their 
retirement plans or their children's education savings in order to give 
the government an interest free loan.
  I have a bill, the AMT Credit Fairness Act that would correct this 
inequity and would allow Americans to use their pre-paid tax credits. 
Unfortunately, the AMT Credit Fairness Act is not part of the Stealth 
Tax Relief Act that we will pass today but I will continue to work for 
its enactment.
  Mr. LINDER. Mr. Speaker, I am a co-sponsor of this legislation and I 
rise in strong support of H.R. 4096, the Stealth Tax Relief Act. A 
couple of years ago, I got a call from my daughter who asked, ``What is 
the AMT and why is it sneaking up on people like me?''
  As a proponent of tax reform, I hear phrases like that every day 
describing the AMT as part of ``a tax code so out of control that now 
it is sneaking up on the middle class and threatening it with an 
unintended stealth tax.'' And while that phrase might indicate that the 
code is an animate entity, it is also a fact that ``the AMT, since its 
enactment in 1969, has been significantly modified in 1971, in 1976, in 
1977, in 1978, in 1982, in 1986, in 1990, in 1993, and in 2001.''
  These facts send a clear reminder that we have created a complex, 
convoluted monster of a tax code that is constantly being amended with 
special provisions targeted to treat Americans differently. The 
intentional harm that the current code is causing in terms of lost 
economic growth is bad enough. Now it appears we have to worry about 
the unintentional harm the code inflicts as well.
  The AMT is a case study of our chaotic code--it forces Americans to 
perform two tax calculations, using two completely different set of 
rules, and it's so difficult to understand that most taxpayers have to 
hire someone to figure it out. And the reason we have the AMT is 
because the code is used to promote various goals through preferential 
tax treatment. Because people were taking advantage of those 
incentives, and reducing their income taxes, the AMT was created to 
make sure wealthy people didn't reduce their income taxes too much. 
Now, it threatens the entire middle class.
  Mr. Speaker, I support every effort to improve this tax system and I 
strongly support Mr. Reynolds' bill to extend AMT relief for millions 
of U.S. taxpayers for an additional year. But the AMT is just a symptom 
of a twisted tax code that is now so broken that it routinely results 
in these kinds of unintended tax consequences and undermines 
hardworking American workers every day.
  Mr. HERGER. Mr. Speaker, because of time constraints during Floor 
debate, I was unable to present my full remarks in support of H.R. 
4096, the Stealth Tax Relief Act of 2005. I would like to request that 
the following comments be published in the Congressional Record for 
Wednesday, December 7, so my remarks in support of H.R. 4096 are 
reflected in the Record in their entirety:

       Mr. Speaker, without today's legislation, the number of 
     Americans ensnared by the Alternative Minimum Tax is 
     estimated to grow to an astounding 21 million in 2006.
       The problem is so great that the Treasury Department 
     estimates that by 2013, an AMT repeal would be more expensive 
     than a repeal of the income tax.
       In my own northern California congressional district, in 
     one particular area, nearly 3,000 constituents face a 
     significantly higher tax burden because of this onerous tax.
       In February of 1986, a levee broke on the Yuba River 
     causing a flood that submerged the community, resulting in 
     millions of dollars in damages.
       Now, after nearly 20 years of legal battles, a court has 
     found the state liable and ordered it to pay damages to flood 
     victims in the amount of $428 million.
       Unfortunately, because individual claimants have to add 
     back attorney fees as AMT taxable income, the flood victims 
     may end up paying some form of tax on 100 percent of their 
     award, even though this is money they never saw.
       This is double taxation, and it is unfair. The attorneys 
     have already paid income tax on the amount they earned 
     through representation.
       Mr. Speaker, it is unfair that these flood victims--who 
     have waited so long to be justly compensated--now should be 
     subject to the AMT.
       The AMT is sorely in need of fundamental reform. It's time 
     once and for all to do away with this middle class tax trap. 
     I urge my colleagues to vote for the Reynolds extension 
     before us.
  Mr. LARSON of Connecticut. Mr. Speaker, I rise today in support of 
the Stealth Tax Relief Act, H.R. 4096, a temporary fix to a much 
larger, more overhanging problem, the Alternative Minimum Tax (AMT). 
Originally intended to ensure wealthy taxpayers paid their fair share, 
the AMT has become a tax on the middle-class. Without adjustments for 
inflation like the federal income tax, the AMT targets a growing number 
of people each year. Taxpayers in states with high property taxes and 
high local and state income taxes, in states like my home state of 
Connecticut, are most hard-hit by the AMT. In fact, Connecticut faces 
the third highest AMT tax liability in the nation.
  H.R. 4096 will pass the House today and again, the House will evade 
its responsibility to find a real solution to the AMT attack on the 
middle-class for another year. The Majority seems to find plenty of 
time to cut social programs, increase the deficit, and afford estate, 
capital gains, and dividends tax cuts to the wealthiest among us, while 
consistently dragging their feet to fix a tax that targets 17 million 
working middle-class families. According to the Treasury Department, 
the Joint Committee on Taxation, and the Congressional Budget Office, 
the tax cuts of 2001 and 2003 have, in fact, tripled the size of the 
AMT problem.
  The American public deserves better. Last month, I supported a 
Democratic proposal in the House Ways and Means Committee that would 
have totally eliminated the AMT for all families with incomes under 
$200,000. Unfortunately, this measure was rejected along party lines. I 
am also a cosponsor of H.R. 2950, the Individual Tax Simplification Act 
that would among other things, repeal the AMT. However, to date, the 
bill has received no attention by the House Ways and Means Committee. 
And now today, I am disappointed that the Majority brought the 
underlying bill to the floor under the suspension calendar, a procedure 
which blocked the opportunity to offer an amendment to fully repeal the 
AMT.
  Americans need real solutions to address these problems, not band-
aids and bumper sticker slogans. In the absence of a real and

[[Page H11147]]

viable solution, I will support this temporary extension. In the 
meantime, I encourage my colleagues in the House to stop discounting 
this crisis and work together to pass real reforms to the AMT.
  Mr. REYNOLDS. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Gilchrest). The question is on the 
motion offered by the gentleman from New York (Mr. Reynolds) that the 
House suspend the rules and pass the bill, H.R. 4096.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. REYNOLDS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

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