Congress passes AMT patch

[FIRE'd@51]

Today, Congress passed an AMT patch for tax year 2007. The patch is an increase in the exemption amount to $66,250 ($44,350) for joint (single) filers. In 2006 the exemption amount was $62,550 ($42,250) for joint (single) filers. Without the patch the exemption amount would have reverted to $45,000 ($33,750) for joint (single) filers.

 

[W2R]

Today, Congress passed an AMT patch for tax year 2007. The patch is an increase in the exemption amount to $66,250 ($44,350) for joint (single) filers. In 2006 the exemption amount was $62,550 ($42,250) for joint (single) filers. Without the patch the exemption amount would have reverted to $45,000 ($33,750) for joint (single) filers.

I guess that's better than nothing. If AMT is just supposed to be for the "fat cat" contingent, it would have made more sense to patch it with $200K($150K) for joint(single) filers. But I guess we should be glad to get anything out of them.

 

[ERD50]

Are there any numbers available on how much this will reduce the income tax revenue for tax year 2007?

-ERD50

 

[DangerMouse]

I'm ecstatic that this has finally been passed because I hope to save $4-5k by not having to pay the AMT.

HR Block have a good calculator which tells you what your taxes are. However it has not yet been updated to take into account this change.

 

[REWahoo]

HR Block have a good calculator which tells you what your taxes are. However it has not yet been updated to take into account this change.

Can you provide us a link?

Thanks...

 

[audreyh1]

Looks like they just fixed the "patch" to be the same as last year?

Audrey

 

[BigBob]

I wonder how many of our tax dollars went into that patch, which, from the looks of it, they will need to visit again each year. At least they got it in before the April 15 deadline so we can do our taxes.

 

[REWahoo]

Last year H&R Block released a free version of 2006 TaxCut software in late November.

H&R Block TaxCut Basic - Reviews and free H&R Block TaxCut Basic downloads at Download.com

I've been unable to find a 2007 release and wonder if Block isn't giving out a free version this year or if the delay by our esteemed representatives in Washington has held things up.

 

[OAG]

Go to TAX ACT and get their 2007 free advance version (final copy will also be free).

 

[Caoineag]

Yeeeck, I think I need to look up info on the AMT, I had no idea we had been skirting just under...

 

[REWahoo]

Go to TAX ACT and get their 2007 free advance version (final copy will also be free).

Thanks, I've already downloaded TaxAct. I was hoping for TaxCut since I've been using it for years and want to use the auto transfer of information feature so I won't have to reenter a bunch of basic stuff.

Heaven forbid, I might have to shell out $20 and actually buy a copy...

 

[FIRE'd@51]

Are there any numbers available on how much this will reduce the income tax revenue for tax year 2007?

approximately $50 billion

 

[ERD50]

approximately $50 billion

Thanks, I also see that they didn't raise taxes anywhere else, so this is not revenue neutral.

-ERD50

 

[bamsphd]

Thanks, I also see that they didn't raise taxes anywhere else, so this is not revenue neutral.

Reportedly, they could find 60 senators who wanted to "patch" the AMT, but they could not get 60 senators to agree on where to raise taxes or cut spending to keep it revenue neutral.

 

[igsoy]

The Washington Post the Senate twice rejected a House-passed AMT patch that would have been paid for by closing down offshore tax havens or by increasing the tax rate on managers of hedge funds and private-equity firms.

The republicans in the Senate blocked the revenue neutral part of this after the House passed it. They are beholden to the .01 percenters who don't have many votes between them, but considering their campaign contributions, I guess their votes are worth much much more than yours and mine.

 

[FIRE'd@51]

The republicans in the Senate blocked the revenue neutral part of this after the House passed it.

IIRC, the Senate version passed 88-5, so many Dems went along with it. Interestingly, both Hillary Clinton and Charles Shumer opposed the taxation of "carried interest" as ordinary income rather than capital gains. Do you suppose maybe that had something to do with campaign contributions?

 

[Goonie]

Thanks, I've already downloaded TaxAct. I was hoping for TaxCut since I've been using it for years and want to use the auto transfer of information feature so I won't have to reenter a bunch of basic stuff.

Heaven forbid, I might have to shell out $20 and actually buy a copy...

My Mom received "TaxCut Premium" in the mail last week. It says it's the exact same software that you have to pay for to purchase online. One of the FAQ's was "Why did we receive this in the mail?" There answer was basically 'Because we wanted to make things easy for you."

Mom doesn't do her own taxes, so that isn't how she got on their mailing list for the free CD. I used TC last year, but I didn't get the free CD.....from them....but I have it now!

You might ask friends or neighbors if they got it in the mail, and see if they want to get rid of it.

 

[igsoy]

IIRC, the Senate version passed 88-5, so many Dems went along with it. Interestingly, both Hillary Clinton and Charles Shumer opposed the taxation of "carried interest" as ordinary income rather than capital gains. Do you suppose maybe that had something to do with campaign contributions?

Of course it did, that is an example of why many Democratic Party voters don't support her in the primaries. There are candidates in the field who will represent them better.

 

[DangerMouse]

The republicans in the Senate blocked the revenue neutral part of this after the House passed it. They are beholden to the .01 percenters who don't have many votes between them, but considering their campaign contributions, I guess their votes are worth much much more than yours and mine.

You seem to forget that many of us ordinary tax payers are caught in AMT hell. We are certainly not incredibly wealthy, we do ok by many standards. However, AMT triggered for us even though we have no deductions besides donations to charity and state tax. We have no dependents and I think our contributions for Federal tax before adding in the AMT was more than sufficient. We live in a State (Ca.) which requires high incomes just to get by.

 

[youbet]

Reportedly, they could find 60 senators who wanted to "patch" the AMT, but they could not get 60 senators to agree on where to raise taxes or cut spending to keep it revenue neutral.

Hmmmm...... Aren't there almost 60 Dem senators now? Wouldn't this have just taken onesy - twosy GOP senators joining in? Seems strange.

Edit: Oooops....what was I thinking? Actually its:

110th Congress (2007-2009)
Majority Party: Democrat (49 seats)
Minority Party: Republican (49 seats)
Other Parties: 1Independent; 1 Independent Democrat
Total Seats: 100

So I guess the Dems would have had to go get the two independents and 9 GOP senators to pass the provision making it revenue neutral.

Anyone know where I can go look at the actual votes by senator? This should have been made revenue neutral and any Dems that didn't back the revenue neutral provision should, of course, be skinned alive.

 

[youbet]

IIRC, the Senate version passed 88-5, so many Dems went along with it.

Kind of an understatement. Didn't almost every Dem go along with it? Supported very, very heavily by Dems.

 

[samclem]

This should have been made revenue neutral and any Dems that didn't back the revenue neutral provision should, of course, be skinned alive.

The "Pay-go" (e.g. pay-as-you-go = revenue neutrality) idea will go the way of Congress's promised earmark reform.

Anyway, I don't know if Pay-go should really apply in this case. If you take the view that the AMT was known to be on the books and that the government was counting on the revenue it would raise, then PAYGO would kick in when the limit was raised, and offsets would need to be found. However, if the present AMT law is viewed as piece of poorly-crafted legislation which, due to an oversight, has no inflation factor built in, then there are no offsets necessary. After al, the AT was going to raise taxes for millions of Americans, so just eliminating a tax increase shouldn't require a corresponding cut (again, from this perspective).

As it happens, the GAO and the CBO do a terrible job of predicting the actual impact of tax legislation, since they generally use static models that assume humans are automatons who will not vary their behavior in response to tax law changes. So, Paygo is flawed from the start.

 

[igsoy]

You seem to forget that many of us ordinary tax payers are caught in AMT hell. We are certainly not incredibly wealthy, we do ok by many standards. However, AMT triggered for us even though we have no deductions besides donations to charity and state tax. We have no dependents and I think our contributions for Federal tax before adding in the AMT was more than sufficient. We live in a State (Ca.) which requires high incomes just to get by.

DM, I didn't forget anything, everyone realizes the AMT is a bad thing for people such as yourself, it is the failure of the revenue neutral thing which should have happened with the fix that we are objecting to. Of course the Dems all voted for the lesser bill, the house bill was being blocked, and they were coming down to the IRS deadline, so they settled. But the dems really wanted the bill that would have had the AMT fix offset by closing off-shore tax shelter loopholes and taxing hedge fund manager's share of profits as income. All the rep. senators and a few of the corporate owned dems wouldn't let that better bill through.

 

[youbet]

All the rep. senators and a few of the corporate owned dems wouldn't let that better bill through.

Not true. Check your facts.

Edited: Nevermind igsoy. The guy I was thinking of didn't vote, as opposed to voting for. And I don't want to arm wrestle over exactly who the "corporate owned" dems are. So, your "all" assertion, while open to question due to the 46:48 vote, is close enough for this discussion.

 

[igsoy]

Not true. Check your facts.

Okay, I can't find it anywhere, which republican senators were for the offsets?