Wednesday, March 14, 2001
|
Wednesday, March 14, 2001 |
|
Collins calls for repeal of alternative minimum tax Calling the individual alternative minimum tax a threat to tax relief, Rep. Mac Collins has introduced legislation to repeal the measure. "The alternative minimum tax was passed more than three decades ago and has completely outlived its purpose," Collins said as he introduced his legislation. "The AMT is complicated, punitive and serves mainly to threaten the tax relief Congress is trying to provide working Americans." The tax was enacted in 1969 to prevent businesses or high income individuals from using a variety of tax loopholes and shelters to artificially reduce their taxes. With the elimination of the most extreme tax shelters and credits through tax reform during the last two decades, the AMT now functions mostly as a complicated and punitive tax, Collins said. In addition, inflation is causing more and more middle income wage earners and families to fall into this tax trap an income group never intended to be affected, he said. "Tax rates and policies have changed, but the AMT has not," Collins said. "It is a complex and unfair tax anachronism." Collins said the Internal Revenue Service itself has called for removal of the tax because it is overly complicated for taxpayers to calculate and difficult for the IRS to enforce. Since the first passage of the AMT measure, Congress has, at times, stepped in to lessen the growing impact of the AMT on taxpayers. In 1993, Congress added an exemption level for those who earned less than a specified income per year. This exemption was never adjusted to keep pace with inflation with the result that each year, more and more taxpayers have fallen into the AMT trap, he said. "My legislation, the Alternative Minimum Tax Repeal Act will end the Band-aids and permanently solve the problem," Collins said. AMTRA takes a three-pronged approach to the individual AMT. First, it increases the AMT exemption level to reflect the inflation since the exemption was passed in 1993 and ends the income restrictions to qualify for the exemption. Subsequently, it will increase the exemption by 10 percent each year. At the end of ten years, the individual AMT will be fully repealed. The exemptions for 2001 will rise from the current $45,000 for the joint filer to $52,000, per year, and for the single filer from $33,750 to $38,000. Married taxpayers filing jointly will find their current exemption of $22,500 rising to $26,000. "When President Bush outlined his tax package, he said he supported additional tax code changes which could provide relief from the AMT," Collins said. "AMTRA will simplify procedures for taxpayers and it will stop an outdated item in the tax code from blocking tax relief the president and Congress are working to provide wage earners." The Joint Committee on Taxation estimates that 1.5 million Americans will be subjected to the individual AMT in 2001. The number of affected taxpayers will more than double to 3.5 million in 2002 with inflation and the expiration of certain provisions. The joint committee estimates 21 million taxpayers may be forced to pay the AMT by 2011. The committee reports taxpayers will save $196 billion over 10 years if Congress adopts Collins' legislation.
|
||