Frist Says AMT Fix May Be Deferred
Wednesday, December 14, 2005
Senate Majority Leader Bill Frist (R-Tenn.) said Congress may postpone until next year a measure to prevent 15 million households from paying $30 billion under the alternative minimum tax, indicating that extending tax cuts on capital gains and dividends was a higher priority.
"I feel strongly that capital gains and dividends should be in the bill when it comes back to the Senate floor," Frist told reporters. Of the minimum tax, he said that "in all likelihood, we'll not be able to finalize that until we get back" in 2006.
The Senate will likely take up the tax-cut extensions either before it adjourns at the end of this week or early next year. Frist's comments signaled that the Senate may remove the AMT measure from budget legislation it passed in November, adopting instead a measure passed by the House last week to extend the 15 percent rate on dividends and most capital gains until 2010.
Congress is trying to wrap up budget legislation. The House voted 234 to 197 last week to approve a $56.1 billion measure that extends the rate on dividends and capital gains along with other expiring tax breaks. The Senate last month passed $68 billion in tax cuts, the bulk of which would prevent 15 million households from being subject to the minimum tax next year. The two chambers have not scheduled negotiations toward a compromise.
Sen. Charles E. Schumer (D-N.Y.) said the delay of the AMT measure was "a punch in the gut to the middle class." The minimum-tax fix, he said, "should have been our number one tax priority and instead, because of right wing ideological objectives, the middle and upper middle class will suffer and only the very, very wealthy will benefit."