WASHINGTON - Ways and Means Committee Chairman Charles B. Rangel (D-NY) joined members of the House Democratic Leadership at a press conference today to discuss pending legislation to provide immediate, responsible tax relief for middle-class families. H.R. 3996, the Temporary Tax Relief Act of 2007 would prevent more than 23 million families from a tax increase under the alternative minimum tax (AMT) while also extending popular tax credits and deductions that expire at the end of the year. This tax relief is fully offset by closing loopholes and eliminating narrowly targeted tax benefits enjoyed by a privileged few. H.R. 3996 is expected to be considered by the full House tomorrow.
“This legislation is the responsible, fair and equitable way to provide millions of working families with tax relief from the AMT and extend expiring provisions. I am simply astounded by the arguments from Congressional Republicans that we can continue to spend billions upon billions of dollars financed by reckless borrowing. It’s like they’re living in an Alice-in-Wonderland storyline where America’s $9 trillion debt and record deficits don’t matter. But deficits and debt do matter because every dollar we borrow places a “debt tax" on future generations who will have to pay for the decisions we make today.
“This responsible tax relief package puts money back in the pockets of millions of middle-class families and protects future generations from tax increases by not adding to our national debt."
Senate Republicans have indicated that temporary AMT relief should not be offset, thereby adding to the Federal deficit. They have threatened to filibuster a revenue-neutral tax package, preventing this must-pass bill from reaching the President’s desk for signature.
H.R. 3996 would provide:
• AMT relief for 23 million Americans
• Property tax relief for 30 million
• Help for more than 12 million children through an expanded child tax credit
• Tax relief for more than 11 million families through State and local sales tax deduction
• Help more than 4.5 million families cover the cost of education through the tuition deduction
• And relief for more than 3.5 million teachers who would be reimbursed for out-of-pocket expenses for their classrooms.
H.R. 3996 contains provisions to change the tax treatment of “carried interest" for investment fund managers. Under the Committee-passed legislation, they will no longer receive a lower capital gains rate of 15% for what is essentially a management fee or payment for services. Partners and managers would continue to receive a lower rate of taxation on returns derived from money they have personally invested.
The Committee began looking at this issue in the context of fairness and equity in the tax code and found no evidence to conclude that these partners or fund managers should receive preferential treatment for the same services provided by other corporate professionals doing the same jobs. The provision changing the tax treatment of carried interest has received broad public support, including several editorials in leading national newspapers advocating for the change.
