Article & Journal Resources

To: Reporters, Editors, Editorial Writers, and Producers
From: House Committee on Ways and Means
Re: Temporary Alternative Minimum Tax Relief
Date: Wednesday, December 19, 2007

Today, the U.S. House of Representatives took an important step to prevent 23 million Americans from receiving an average $2,000 tax increase per family because of the Alternative Minimum Tax.

While the precise nature of the legislation—providing tax relief without adhering to the principle of “pay-as-you-go” (PAYGO)—was not the preferred option of House Democrats, allowing the AMT to eat away at incomes of middle-class families was something that the Democrats could not let happen.

The Democrats objection to waiving PAYGO is simple: Our children and grandchildren should not have to pay for tax cuts we give ourselves. The Republican solution of waiving PAYGO seems easy only because the people who ultimately incur tax increases—our children and grandchildren—don’t vote.

The Center on Budget and Policy Priorities estimates that more than two-thirds of the $50 billion cost of this year’s AMT patch is due to President Bush’s 2001 and 2003 tax cuts, which primarily benefited the most wealthy Americans. The Administration was well aware that these tax cuts would force millions more Americans to pay the AMT. Instead, President Bush chose to ignore the AMT and allow it to take back all or part of the “promised” tax cuts which reduced the cost of the tax bills in the early years of this Administration.

The Administration’s very clever and deceptive trick has left House Democrats in the difficult position of choosing between American taxpayers and future generations. A trick that now threatens our national security by forcing America to borrow billions of dollars from foreign governments. If the 2001 and 2003 tax cuts had not been enacted, it is estimated that 10 million Americans would owe AMT this year rather than 23 million.

Twice, House Democrats have given President George W. Bush and Republicans in Congress an opportunity to eliminate the looming crisis of the AMT without saddling future generations with the bill. Twice, President Bush and his Republican allies have chosen a handful of multi-millionaire money managers or people who shift their money to off-shore tax havens over millions of middle-class families.

Given the obstacles posed by these wrong-headed priorities, House Democrats were left in the less than tenable position of ignoring the costs of AMT relief by confirming Bush's skewed agenda or allowing the AMT to engulf the paychecks of teachers, firefighters, and police officers. Left with no options from a president who time and again turns his back on working families, Democrats chose to do what's right for them.

While the president and his GOP allies in Congress may attempt to paint this as a victory or an example of Democrats backpedaling, this is an example of the tough choices that responsible leadership requires. Only in the cynical world of Washington would a lame duck president and bitterly frustrated minority attempt to claim victory at the expense of future generations and our national security.

For more information about this issue contact 202-225-8933.