[Congressional Record (Bound Edition), Volume 153 (2007), Part 8]
[House]
[Pages 11556-11560]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1730
                        ALTERNATIVE MINIMUM TAX

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Pennsylvania (Mr. English) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I rise tonight to talk 
about the tax increase that's coming. Now, we know that in the budget 
that the Democratic majority put together in the House, they posited 
the largest tax increase in American history. But that's not the tax 
increase that I have been referring to. The tax increase I am talking 
about is something that had its genesis in the 1960s, was renewed in 
the 1980s, was never insulated against inflation and has been allowed 
to run riot across the American Tax Code.
  The tax increase I am talking about is the alternative minimum tax. 
In the late 1960s, the alternative minimum tax was created to deal 
with, at most, several hundred dread taxpayers. They were the people at 
the very pinnacle of the American economy who somehow were able to 
position themselves using a hyper-complicated Tax Code, using it to 
free themselves almost completely or, in some cases, completely, of tax 
liability.
  In the late 1960s, correctly, Congress, looking at the complexity of 
the Tax Code and looking at this outcome, thought that isn't fair. So 
they created an alternative calculation that would provide that 
everyone pay at least a certain tax liability. That policy was renewed 
and actually expanded in the late 1980s when Democrats controlled the 
House of Representatives.
  In the process, this alternative minimum tax was applied to what was 
then very high-income thresholds. Lo and behold, it was never indexed 
to inflation. Accordingly, more and more people have fallen under this 
alternative unfavorable tax calculation, which I am going to talk about 
in this hour, and more and more people that we would consider to be 
middle class have found themselves under the alternative minimum tax.
  More and more small business owners have seen the incentives that 
they expected to get for making investments in the economy stripped 
away. More and more families have seen pro-family tax policies taken 
away from them by the alternative minimum tax.
  Far from applying to a few hundred taxpayers, today the alternative 
minimum tax is applied to nearly 3 million taxpayers. But in past 
Congresses, quietly, we have moved to at least protect the people who 
would have been hit in recent years with additional tax liabilities 
from being covered. We have put in place a series of patches, patches 
that would protect taxpayers that we wanted to give tax relief from 
being hit with the AMT.
  Those patches have become more expensive. To apply the annual patch 
next year, we would have to, in effect, set aside $47 billion to do it. 
But if we don't do it, not a few hundred taxpayers, not 3 million 
taxpayers, but 23 million taxpayers in America, including a significant 
part of the middle class, would have to pay the AMT.
  That, frankly, is flat-out unfair and unsustainable. It's a tax 
increase that Congress had never intended and that the last few 
Congresses have acted to protect the middle class against.
  Yet what has happened here, we find that the majority, the House 
Democrats, particularly, and their budget, haven't set aside a dime for 
a patch to deal with the AMT. They want to spend the money, even as 
they want to spend the money from the lapsing of some of the tax 
policies that we put in place at the beginning of the decade. They 
don't call it a tax increase, but they take the money and run.
  By not fixing, by not patching the AMT, implicit in their budget is a 
major tax increase on top of that, on a major part of the middle class. 
Yet it's far worse than that, because we have been hearing recently in 
the committee that I serve on, the Ways and Means committee, that some 
in the majority want to make changes in the AMT, supposedly to reform 
it. But they do it by raising taxes elsewhere, and that's what I am 
here tonight to argue against.
  If we deal with the AMT, not by controlling spending and by putting 
in place a long-term fix, but by simply raising taxes, we run the risk 
of having a dramatic impact on the economy. I have some numbers here 
that I think put this into a fairly dramatic perspective. As we have 
looked at the bracket creep, we have seen many middle class families, 
particularly in communities with higher taxes and higher standards of 
living, paying, potentially, the AMT.
  What we have looked at is that some of the proposals that have been 
laid out there would provide AMT tax relief to middle class taxpayers 
by increasing the tax burden. Specifically, we understand that some in 
our committee are considering an AMT exemption for families earning up 
to $250,000.
  That sounds great, but it also, potentially, will raise taxes at the 
high end. We have just had an election in France. In France, one of the 
issues was that their economy hasn't been very dynamic because of their 
top tax rate. The top tax rate in France is about 48 percent. 
Unfortunately, fixing the AMT would require so much revenue that if 
it's only done through raising the top rate, our top tax rate would be 
in the range of 48 percent. That would be a significant break on the 
economy.
  Let me put this into a local perspective. I represent a district 
where not many people are in the highest income levels, but we have 
many local businesses and many local manufacturers that are subchapter 
S companies. They are closely held relationships, and they

[[Page 11557]]

exist, basically, and pay personal income tax rates. This would, in 
effect, on some of our most dynamic job-creating local companies put 
the brake on their growth.
  This is a direct tax on jobs in the emerging economy. As such, it is 
a real concern in a place like northwestern Pennsylvania where we have 
mainly people who are working class and middle class and very few high-
income people. We think that this would have a big impact directly on 
our local economy.
  Ladies and gentlemen, I am very concerned that we get this right, and 
I am also very concerned, not only that we fix the AMT but also that we 
do it in the right way. Now, we have a proposal, and I think it's very 
important to realize there is a proposal out there to repeal the 
individual AMT.
  I am a cochairman of the zero AMT caucus, and I am prime sponsor of a 
bill, H.R. 1366, that would flat out repeal the AMT. In my view, the 
AMT is a Frankenstein's monster, which over the years has affected more 
and more taxpayers by subjecting them to a parallel tax system that 
arbitrarily and sometimes unpredictably deprives them of tax 
preferences and incentives that they have planned for.
  In effect, the AMT runs the risk of punishing millions of middle 
class Americans every year with a tax that is, as I have said, was 
intended only for a handful of the highest level earners. My 
legislation once and for all would rid the Tax Code of this arcane and 
unfair tax policy and remove a significant barrier for economic growth 
in the American economy.
  The AMT is not only a source of higher taxes; it's a source of 
complexity in the Tax Code. Getting rid of it is a priority for many of 
those who have advocated a simpler Tax Code.
  The AMT, I believe, is unfair on the face of it, because it is now 
applied to a whole host of taxpayers that Congress had originally told 
them, this will never apply to you. While the structural features of 
the regular income tax are indexed to inflation, the AMT is not. As a 
result, as incomes have risen over the past 20 years, more and more 
taxpayers have fallen into the AMT. I think that Congress needs to act 
now. Act now to repeal the AMT or at very least to patch it.
  As I said earlier, it would take $47 billion, which is a lot of 
money, but in a $3 trillion budget, it's something that we could find 
the room to do. Patching for 2 years would cost, they estimate, $110 
billion. That's also something that's expensive, but it's something 
that we should be prepared to do.
  An alternative approach would be to make the AMT a temporary tax 
provision. I have argued potentially for doing that if Congress does 
not have the will to pursue flat out repeal. But the idea of getting 
rid of the AMT by simply raising taxes is very, very dangerous.
  I was always struck by a quote from H.L. Mencken, ``When a new source 
of taxation is found, it never means, in practice, that an old source 
is abandoned. It merely means that the politicians have two ways of 
milking the taxpayer where they previously only had one before.''
  I think that the unfortunate thing about the AMT is that it is 
generating now so much revenue that people in Washington are afraid to 
do away with it. I think we need to have an aggressive approach to 
getting rid of the AMT that does not simply shift the tax burden more 
to taxpayers.
  We need to come up with a creative way of dealing with this problem. 
I believe that there is the will to do it. I have offered to work 
across party lines with my colleagues on the other side, and I want to 
extend that offer again today.
  I do think that if we approach this as something that has to be fixed 
through a combination of savings and maybe other changes in tax policy, 
there is going to be a range of ways that we could deal with this 
problem and certainly to protect the middle class from the AMT falling 
on it.

                              {time}  1745

  But we are concerned when we hear the press reports that suggest that 
the House Democrats simply want to use this to raise taxes.
  Here is what in effect they are doing. They are taking that 
additional 20 million taxpayers and they are effectively holding them 
hostage for a higher tax level which is going to generate revenue for 
them to fulfill their campaign promises. We think that there has got to 
be a better way of doing that.
  We are also concerned that the AMT can become a locomotive, 
recognizing that many taxpayers will otherwise be hit by liabilities 
that AMT relief will become a basis for running through a bill that 
generates much higher levels of revenue, in effect, manufactures a 
crisis. That way, the AMT bill becomes a locomotive for driving much 
higher taxes in the economy.
  Today, I would argue very simply, Mr. Speaker, that Washington take a 
very high percentage of what people earn in America today. The problem 
and the source of our national deficit is not the fact that we don't 
generate enough revenue. In fact, revenue has been growing steadily on 
a year-to-year basis. The problem is not that we haven't entertained 
tax increases, because in effect we have been passing and adopting tax 
policies; curiously, through lower capital gains rates we have been 
generating more revenue from capital gains. The problem has not been a 
lack of revenue. It has been a lack of spending restraint. And, 
unfortunately, our friends on the other side of the aisle have 
approached the AMT problem exclusively as one that needs to be dealt 
with through revenue.
  I think people need to understand what level of taxpayer we are 
talking about here. The AMT would be applied to people who are 
authentically middle class. I am struck here by the fact that if we 
look today, Washington is left to deal with this growing monster that 
is the AMT that is going to ensnare 23 million Americans come April 15, 
2008. It operates as a parallel tax system, and in effect it takes away 
from taxpayers some preferences that Congress had firmly intended to 
them. This, I think, represents something that is fundamentally unfair.
  We are talking here that, for the year 2006, under the AMT, the basic 
exemption from the AMT is only $62,550 for joint returns. This is not, 
in my view, a wealthy couple. It is $42,500 for a single and head-of-
household returns, which in turn is subtracted to obtain AMT taxable 
income. It is the income above that that pushes people into the AMT.
  These exemption levels, as I have pointed out, are the result of a 
patch that past Congresses have enacted. In other words, they are 
temporary and are scheduled to revert in 2007 to their prior levels of 
$45,000 for joint returns and $35,750 for unmarried taxpayers.
  The basic AMT exemption is phased out for taxpayers with high levels 
of AMT income. A two-tiered rate structure of 26 percent and 28 percent 
is assessed against AMT taxable income. The taxpayer then, and this is 
how it works, compares his AMT tax liability to his regular tax 
liability and pays the greater of the two. As a result, middle-class 
Americans, hardworking families, are falling victim to what was, and 
always was, intended to be a policy that was aimed at the wealthiest 
and which ultimately at the end of the day is simply bad tax policy.
  We think that we need to do a better job of dealing with the AMT, but 
to do that, simply raising taxes, is the wrong way to go.
  How high would taxes have to go to deal with the AMT problem? I am 
struck by an estimate by the Urban Institute in Brookings Tax Policy 
Center that took a look at this question and came back with some 
startling figures. They argue that, in order to repeal the AMT, the 
majority, if they were to do that simply through tax increases, would 
have to increase the top three brackets very substantially. This study 
estimates that the majority would have to increase the 28 percent, 33 
percent, and 35 percent brackets to 32.2 percent, 38 percent, and 40.3 
percent respectively.
  On top of the already enormous tax increase in the Democrats' budget, 
this level is confiscatory tax policy and it is a recipe, in our view, 
for a quick and nasty economic slowdown.

[[Page 11558]]

  Well, I sincerely believe that there is the potential for a 
bipartisan consensus here. I think what we are seeing is a setup for 
much higher taxes; and that is why I am here on the floor tonight, to 
blow the whistle on it.
  In my own district, in Pennsylvania's Third Congressional District, 
in 2005, a little over 2,700 taxpayers were impacted by the AMT. By 
contrast, if Congress does not act, in 2007, roughly 18,500 taxpayers 
will be hit with the AMT. This is a serious tax bite, and it has to be 
dealt with in a serious way and not simply by raising taxes.
  Mr. Speaker, the AMT is a classical example of the rule of unintended 
consequences. The fundamental reason for the spread of the AMT is that 
the exemption amount was never indexed to inflation. As a result, the 
AMT spread rapidly before the 2001 and 2003 tax laws were adopted, and 
it would have continued spreading without those laws. It is projected 
to spread further after 2010, even if those laws are sunset. Taxpayers 
who move on the AMT in 2007 through 2010, due to the 2001 and 2003 tax 
laws, will still enjoy a net tax cut from those laws.
  The most recent attempts to deal with the AMT have been through the 
use of patches; yet, I would argue that a more comprehensive solution 
is more desirable.
  You know, it is also important to realize, we had an opportunity to 
repeal the AMT in 1999. It passed the House and it passed the Senate. 
It was part of a broader tax bill, and it was recognized at that time 
to be a very important priority. Repealing it at that time was 
something that we knew we could afford to do; yet, in 1999, the Clinton 
administration vetoed that legislation. Unfortunately, some of those 
who now want to deal with the AMT by raising taxes voted to sustain 
that veto, voted in effect to leave in place a tax that was never 
intended for the middle class.
  The individual AMT doesn't just affect individuals. It also hurts 
small businesses. The many small businesses that pay the individual AMT 
lose the benefit of important tax incentives, such as the R&D tax 
credit, the work opportunity tax credit, accelerated depreciation, and 
many other general business tax credits. It is, anyone who has been in 
it and any accountant will tell you, ridiculously complicated and 
arbitrary. It is almost impossible for the average taxpayer and small 
business owner to calculate the AMT without help from a tax preparer or 
from tax software.
  If we are serious about dealing with the problem of complexity in the 
Tax Code, one of the quickest things that we could do, one of the 
simplest things that we could do is flat-out repeal the AMT. We think 
this is something that ought to be of direct interest to us today, and 
we are very concerned that this real problem is being commandeered by 
those who simply want to raise taxes.
  Our solution is that we want to see action today. We want to see both 
parties come together and talk about this problem honestly, not just 
discuss plans to raise taxes behind closed doors. We want to see an 
opportunity here today to discuss how we can use fiscal discipline and 
restrained spending to get rid of the AMT, or to potentially sunset it 
and phase it out over time. It is not too late to do that.
  We believe that there are ways to deal with the AMT as an alternative 
that don't require us to bring our top tax rates up to the level of 
France. I believe that there are means of dealing with this problem 
without sucker punching our economy. I believe that we have the 
opportunity to deal with this problem fairly and honesty without 
presuming a tax increase.
  We tend to forget this in Washington, but when somebody is paying out 
more in taxes, that is a tax increase. Whether that tax increase was 
the phaseout of a tax provision that was put into the law years ago and 
simply not renewed, whether that change in tax policy is something that 
was a policy from the 1960s that was never adjusted or modernized, the 
fact is we anticipate a tax increase unless we show fiscal restraint 
this year. And the Democratic budget, in addition to positing the 
largest tax increase in American history, has manufactured this AMT 
crisis and created a challenge for us that the Democrats are apparently 
proposing to respond to simply by raising taxes.
  When people hear that the only folks experiencing the tax increase 
are going to be the highest income people, that doesn't tell the whole 
story, because so many jobs are tied up in companies that are also 
taxed at those rates. This is a challenge that I think requires an 
authentic bipartisan solution, not just a tax increase.
  Mr. Speaker, I yield to the gentleman from Kansas such time as he may 
consume.
  Mr. MORAN of Kansas. I thank the gentleman from Pennsylvania for 
yielding time, and I thank the Speaker this evening for recognizing me.
  Mr. Speaker, 20 minutes can go by in a flash; 2 minutes seems like an 
eternity. Last Friday night, Greensburg, Kansas, was struck by a 
devastating tornado. With 20 minutes' warning, I am sure the people of 
Greensburg did everything possible to protect their homes, their lives, 
to gather their loved ones, to find the basement, to seek the shelter. 
Twenty minutes is an awfully short period of time to try to save your 
life.
  Two minutes, the time that it takes for the tornado 1\1/2\ miles 
wide, winds blowing 207 miles an hour, 2 minutes it takes to destroy a 
community.
  The losses last Friday night in Greensburg, Kansas, are significant. 
The photograph I have with me demonstrates the look of a town, a county 
seat town of Kiowa County, Kansas, population about 1,500. In many 
ways, a typical Kansas community; in many ways, a typical small town in 
rural America.
  Mr. Speaker, I have been in Greensburg, Kansas, for the last 3 days. 
And perhaps what I see is typical, but what I see is heroics. From the 
moment the tornado struck, the people of Greensburg arose to the 
occasion, and every moment since then, their lives have been devoted 
toward making certain that people are okay, seeking recovery of their 
loved ones and their property, and trying to make certain that everyone 
is found and that life is preserved.
  Mr. Speaker, 2 minutes did a lot of damage to a community; and yet in 
every conversation I had with the citizens of Greensburg, ultimately at 
least a small smile would come upon their face because they were able 
to count the blessings that they had despite the tornado. They were 
able to talk about the next opportunity they have to rebuild their 
lives, the people's whose lives were saved, the people whose lives are 
here today.
  Mr. Speaker, this community has lost its entire housing structure. I 
walked through Greensburg for about 45 minutes on Saturday, a town that 
I represented as a State senator and now as a Member of Congress, and I 
found one home in that 45 minutes that I thought would be habitable.

                              {time}  1800

  The downtown business district is gone. You know, especially, Mr. 
Speaker, how difficult it is to preserve and enhance a business 
district in rural communities.
  This is a community that has a business district maybe of six or 
seven blocks, both sides of the street. But every business destroyed. 
Gone is the city hall. Gone is the high school. Gone is the grade 
school. Gone is the hospital. Gone is the library.
  This community faces many challenges, Mr. Speaker. But in each and 
every instance, not only have the citizens of that community arose to 
the occasion, not only have the citizens of that community done 
everything they could to save lives and protect property; but now 
already they talk of, how do we rebuild our hometown?
  I spent a little time with the national media who are covering this 
story in Greensburg, Kansas, and my guess is Greensburg, Kansas, is 
probably a foreign country to many of them. And their question is, as 
they look across the rubble that's demonstrated in this photograph is, 
Congressman, can you really believe that this community has a future; 
that they will be around 2 years from now, 5 years from now, a decade 
from now? And the answer is yes.

[[Page 11559]]

  I don't know a lot about lots of other communities in the country. 
But I know about the people of Greensburg, Kansas, and they will make 
every effort to see that their community survives and prospers, and 
that their children and grandchildren have a future there. You know, 
there's a special place we all call, it's called home. And everybody 
wants to live where it's home. And so, as the folks of Greensburg try 
to pick up their lives, rebuild their homes, re-establish the 
businesses, recreate a community, they just want Greensburg to be home 
again.
  And so tonight I rise to commend them for their spirit, acknowledge 
their bravery, speak about their compassion and love for their friends 
and family and neighbors. And I especially want to talk about the city 
officials, the mayor, Lonnie McCollum, the city manager, Steve Hewett.
  Perhaps people don't realize that the people who are there today 
trying to restore the electricity, the water, the sewer, the telephone 
service, the power, they, too, lost everything. So as the city 
officials have gone back to work trying to restore the basic needs of a 
community, they face the challenges of not having a home, vehicles 
destroyed, families living outside the community.
  And Mr. Speaker, in addition to the city officials and the people of 
Greensburg, the American Red Cross, the Salvation Army, Heart to Heart, 
church groups, hundreds and thousands of people across the country on 
Sunday said their prayers for the people of Greensburg, Kansas. 
Offering plates were passed. The community of Haviland, a small town 
much smaller than the community of Greensburg, 15 miles down the road, 
the grocery store open on Sunday. I was there. I watched as the owner 
of the grocery store, no small task to keep a grocery store in 
Haviland, Kansas, alive and well, but I watched as customers placed 
groceries on the counter. And the grocery store owner said, where are 
you from? And the answer was, Greensburg. No charge.
  That's the community that people call home in Kansas and many places 
across the country. And it's that effort that we are seeing today in 
which people come to the aid and rescue of their friends and neighbors 
and people they don't even know to make certain that good happens in a 
very difficult and challenging time.
  And we are pleased with the National Guard. We are pleased with the 
services we have with surrounding communities and their law 
enforcement, emergency preparedness. And FEMA has arrived on the spot 
almost from day one, almost from the first moment the tornado struck.
  I just got off the phone with the National Weather Service in Dodge 
City, Kansas. 20 minutes is not very long. But that 20 minutes, because 
of the efforts of the folks forecasting the weather that night, saved 
lives.
  And I would ask that Kansans and Americans tonight again say their 
prayers for the people of Greensburg, that they recognize that we in 
America, no matter where the challenge or difficulty lies, we are in it 
together. And I would ask that, throughout the course of time, that the 
contributions be collected, the efforts be made to restore the 
community and that all Americans share in that process.
  The people of Greensburg ought to be reassured that we, in Congress, 
we, as the Federal Government, will do everything within our power to 
assist them in their efforts. We want to reassure them that the future 
is theirs, and we're here to help.
  And the role that we play as a Federal Government, the role that all 
the agencies who have arrived to provide assistance is important. But 
the reality is that Greensburg, Kansas, has a future because the people 
who call Greensburg home want to ensure that future comes tomorrow, 
next year and for another generation.
  Mr. Speaker, I thank you for the opportunity to pay tribute to a 
community back home.
  Mr. ENGLISH of Pennsylvania. Will the gentleman yield?
  Mr. MORAN of Kansas. I'd yield to the gentleman from Pennsylvania.
  Mr. ENGLISH of Pennsylvania. First of all, I want to thank the 
gentleman for his stirring words. I can say in northwestern 
Pennsylvania, we have watched the developments in Kansas with horror, 
because it was just a couple of decades ago that we had a series of 
major tornado events that very much marked, seemingly immutably, many 
of our rural communities. And I think of Albion, Pennsylvania, and how 
it took years for its downtown to bounce back.
  Can I reassure the gentleman that I think all of his colleagues 
appreciate his plea, appreciate the terrible dilemma facing so many of 
his constituents? And you can count on our solidarity in this effort.
  And it seems a little trite to point this out, but I have to say, the 
gentleman has always been one of the most eloquent voices for rural 
America. He has done a great job here tonight of laying before us the 
plight of this community. But we are particularly grateful for his 
advocacy tonight, and I want to say, our prayers will be with you. Our 
resources will be with you, and Northwestern Pennsylvania will be there 
for Kansas in any way we can help out.
  Mr. MORAN of Kansas. I thank the gentleman and appreciate the words 
of encouragement, the phone calls, the letters and the conversations I 
have had with my colleagues from across the country who, like you, 
express their care and concern for the people of Kansas.
  Mr. POMEROY. Will the gentleman yield?
  Mr. MORAN of Kansas. I'd be happy to yield to you.
  Mr. POMEROY. I just also very briefly, representing the other side of 
the aisle, want to echo the statements so eloquently made by the 
gentleman from Pennsylvania.
  Jerry, you spoke right from the heart. We can feel the pain that 
you're feeling on behalf of those who have had their lives just 
devastated. It's important for them to know that they're going to have 
your first class advocacy. And you certainly just put that on display 
tonight.
  And it's also important for them to know that we offer them our 
prayers. And beyond that, we will be with them as they rebuild.
  I represented a city that got flooded, and it took years, but we just 
had the 10-year commemoration of that event, and this city is back, 
bigger and better than ever.
  Now, I've never seen anything like the picture that you put on 
display tonight. It's a different challenge. A different magnitude of 
effort's going to be required, but we will be with you. The Federal 
Government will be there, and we will follow your lead as we fashion a 
response that meets the need, the tremendous need in the wake of this 
tornado. I yield back.
  Mr. MORAN of Kansas. I thank so much the gentleman from North Dakota 
who, I know, like the gentleman from Pennsylvania, understands that 
rural America is a special place, and the place called home, in this 
case a place called Greensburg, Kansas, matters a lot, not only in the 
future of that community, but in the future of a way that we try to 
preserve here, a way of life that matters, I think, to all of America.
  Again, I express my appreciation to my colleagues for their support. 
I remind the folks of Greensburg, Kansas, that we'll be an ally. I 
thank those who have worked so hard to this point to see that there is 
an opportunity for a future.
  And tonight I especially say my prayers for the family members of 
those whose families lost their lives. Ten people died in the tornado 
on Friday night.
  Life is a very precious thing, and we offer our prayers. We seek the 
support of all as we try to rebuild Greensburg, Kansas. I thank the 
gentleman for yielding.
  Mr. ENGLISH of Pennsylvania. I thank the gentleman for his 
contribution.
  Mr. Speaker, I am going to keep my remaining remarks brief and, 
again, salute the gentleman for taking the time to come down and share 
the experience of his district and his community with

[[Page 11560]]

this awful weather disaster, which we in northwestern Pennsylvania 
certainly understand and certainly we will reach into our pockets and 
be generous in helping our fellow Americans.
  But, Mr. Speaker, I'd like to, for a moment, return to my prior 
topic, put my green eye shade back on and talk about the AMT and its 
potential effect on taxpayers.
  You know, one point that I hadn't had the opportunity to make 
earlier, was that over the past few weeks, in the ramp up to what we 
fear will be an attempt to use the AMT as a basis for a broader tax 
increase, we've heard made the strange argument by our friends on the 
other side of the aisle that somehow, the AMT is falling on more 
families because of the tax cuts enacted in 2001 and 2003. This 
argument has been echoed within the Ways and Means Committee, and it's 
bizarre on the face of it. But there are actually arguments that are 
being made trying to connect these dots and square this circle.
  The argument is that, as a result of reduced income tax rates 
relative to the AMT, more taxpayers are subject to the AMT. Conversely, 
this logic maintains that if income taxes are increased, less people 
would be subject to the AMT. It's an odd reform that raises taxes on 
Americans, and this smells an awful lot like robbing Peter to pay Paul. 
After all, if taxpayers are paying the AMT, or paying the basic income 
tax, one way or the other, what is relevant to them is how much they're 
paying.
  The argument we are hearing from the other side simply runs roughshod 
over the facts. The AMT is growing significantly because the tax 
brackets involved were never indexed to inflation. Clearly, no American 
is worse off under recent tax relief. And fewer taxpayers are subject 
to the AMT than otherwise would be as a result of the patches that that 
tax relief contained.
  I have, I believe, a number of charts, but I am not going to trouble 
you with them at this time of the evening, that demonstrate that this 
problem has been stated in an unusual way. It is misleading to claim 
that the 2001 and 2003 tax cuts led to more people paying the AMT.
  The fact is, between the patches and the tax cuts, fewer people are 
paying the AMT today than would have under pre-2001 tax laws. This is a 
very important revelation.
  The fact is, past Congresses have moved, in budget after budget, to 
protect the middle class from the ravages of the AMT. Notwithstanding 
that, the AMT now hits nearly 3 million taxpayers, where it was 
originally designed only to hit a few hundred. Without a patch, the AMT 
would fall on 23 million taxpayers.
  Because of that added tax liability on 20 million taxpayers, fixing 
the AMT is certainly a challenge. But to me, it's a much bigger 
challenge to argue that somehow we should let the AMT fall on these 
people when it was never conceived as a tax to be applied to them.

                              {time}  1815

  The fact is the AMT at the current rate runs the risk of crowding out 
the rest of the tax code and becoming the Tax Code, and that would be a 
disaster. The AMT does not treat families as favorably. It does not 
treat small business investment as favorably. It doesn't have the 
nuances of the current Tax Code, and it simply has higher rates.
  We believe that in the end, the real solution is fundamental tax 
reform, to move to a reformed tax system that contains no AMT but 
through its simplicity also requires no AMT to guarantee that everyone 
pays what they are obliged to pay. Through simplicity we can reduce the 
tax gap. We can make the Tax Code more predictable, and we can provide 
through fewer loopholes fewer opportunities for people to take unfair 
advantage. That is the real solution at the end.
  I believe, though, that we are going to see this year a concerted 
effort by the new majority to do what they did the last time they were 
in the majority, and that is to push through massive tax increases. The 
AMT, it looks like, is going to be their first excuse to do it. So it 
is going to be the first real test of this Congress, whether it is 
going to take a different route than that that we traditionally expect 
or whether it is going to go down the old path of tax and spend, 
raising taxes, expanding the size of government, and ultimately hitting 
the taxpayers in newer and more subtle ways.
  Enacting French tax structures is not the solution to growing the 
economy. It is not the solution to the deficit, and it is not the 
solution to the AMT.
  I think the time has come for Congress to deal with this issue 
honestly, to bring it out into the open. My hope is that our committee, 
the Ways and Means Committee, will have an opportunity to do hearings 
specifically on this point. As ranking member of the Select Revenue 
Measures Subcommittee, I also hope that we have the opportunity there 
to more closely examine the AMT and to build on recent hearings to look 
at actual solutions and come up with a solution that reduces the tax 
burden and protects the middle class rather than simply raising taxes. 
That may be a challenge that requires statesmanship, but I believe the 
time has come to deal with this issue directly.
  Anyone who, I believe, signs on to what the papers tell us might be 
the solution here can't claim that they are following certainly the 
dictum of Americans for Tax Reform, which years ago got many Members of 
Congress to sign a pledge not to raise taxes. I believe that any AMT 
solution that raises taxes will put Congress on record as being in 
favor of Big Government and higher taxes. I believe that we need to 
look at creative alternatives and the time has come for that.
  Mr. Speaker, I am grateful for the opportunity to take my party's 
leadership hour.

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