Wednesday, May 03, 2006

AMT Relief Nears Conference OK, Dividend and CG Cuts Kept for Two Years

Recent reports indicate that a two-year, approximately $70 billion deal will provide AMT relief to about 15 million taxpayers and keep the dividend and capital gains tax cuts in play. Speculation centers around keeping the Senate AMT language (about $42K for single, $62K for MFJ; nonrefundable credits allowed as offsets against the AMT) which would drop the number of Americans affected by the AMT from 18.9 million to 3.6 million. Senate Finance Committee Chair Charles Grassley is already telling off disaffected Democrats, claiming that they are ignoring the relief to middle-income families that would otherwise be affected by the AMT.

I LIKE the AMT move and would not mind either scrapping the AMT or at least setting the exemption so high that only very high income taxpayers would even have to pay attention to it. The dividend and capital gain portion is understandably more controversial; I hope that none of the middle-income tax incentive provisions (such as the teacher supplies incentive) were jettisoned for CG/dividend relief.


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