House Ways and Means Committee chair Charles Rangel (D-NY) is on a scavenger hunt. With his sights on major Alternative Minimum Tax (AMT) reform, he's on the lookout for offset provisions, the bigger the better. Reportedly, he's agreed to have House Select Revenue Subcommittee chairman Richard Neal (D-MA) vet solutions to the problem of how to keep the AMT from engulfing millions more taxpayers this year and beyond. None of the solutions will be cheap; all will require offsets. Neal plans to open hearings in March on ways to pay for the $1 trillion cost of repealing the AMT, and Rangel has given notice that corporate tax breaks extended by Congress in recent years may come under scrunity. A Bloomberg article on this issue, published Monday, spotlights some of the largest of these breaks, putting a few companies' effective tax rates under the microscope. General Electric Co.*, an example it cites, reduced its overall U.S. tax rate to 18 percent in 2005 from 32.5 percent in 1995, largely because of the rules congressional Republicans enacted during those years. "Eli Lilly, Hewlett-Packard* and other companies have also pushed their tax rates well below the top marginal rate of 35 percent in the last decade by basing operations in lower-tax countries and taking advantage of the U.S. rules," it adds. Measures limiting the foreign tax credits companies claim for payments to other governments or setting new regulations on transactions that shift income from subsidiaries in higher-tax countries to those in lower-tax ones are politically and fiscally tempting. It's unlikely that Rangel and Neal have a sweeping policy change in mind, but rather some quick hits. Most likely the initial focus will be on abuses of current law that Neal says are costing the government "an awful lot of money." Just what the chairman ordered. -------- * Incidentally, major federal contract recipients as well. See OMB Watch's FedSpending.org current company contractor profiles for: General Electric Hewlett-Packard