WASHINGTON - The House of Representatives today voted in favor of H.R. 4351, the AMT Relief Act of 2007, legislation providing immediate tax relief to millions of families who would otherwise pay higher taxes under the alternative minimum tax (AMT) this year, without adding to the national debt. H.R. 4351 would also provide a tax cut to millions of families by enhancing the refundable child tax credit, estimated to help more than 12 million children nationwide. These provisions are paid for by closing a loophole to prevent hedge fund managers and other individuals from using offshore tax haven corporations to defer taxes on compensation received for providing investment services. Ways and Means Committee Chairman Charles B. Rangel, author of H.R. 4351 offered the following remarks during debate on the bill:
"Once again, the House has fulfilled its constitutional responsibility and reported out a bill to provide immediate tax relief for more than 23 million families who would otherwise face a tax increase this year under the AMT. This bill would provide immediate tax relief without adding to the debt by closing a very unfair provision in the tax code, which no one has come to me to defend, that allows a very limited number of people to escape tax liability through offshore havens. I do not see how anyone could be opposed to this bill.
"We have three options for providing this tax relief - either you cut programs, raise revenue or listen to Republicans mumble excuses on how this isn’t borrowing. Enough of the mumbling. Can’t we unite on this and let the Senate know that the House acted in the best interests of the American people and passed a responsible tax relief bill that will not burden future generations with more debt?
"With passage of this bill, we’re giving the Senate Republicans another opportunity to be responsible and hopefully this time they will do the right thing and support this critical relief."
H.R. 4351 would extend for one year AMT relief for nonrefundable personal credits and increase the AMT exemption amount to $66,250 for joint filers and $44,350 for single filers to ensure that no additional taxpayers are liable for the AMT this year. The legislation would also increase the eligibility for the refundable child tax credit in 2008 by lowering the income floor for qualification to $8,500.
Short Summary of H.R. 4351:
Ensures that no additional taxpayers pay the AMT this year
Expands the refundable child tax credit to provide relief to more than 12 million children
Closes loophole allowing hedge fund managers to defer compensation in offshore accounts
Delays implementation of worldwide allocation of interest
Clarifies the economic substance doctrine
Creates uniform penalty for failure to file partnership and S corporation returns
Increases information return penalties
Increases general failure to file return penalties by taking inflation into account.
