Alternative Minimum Tax (AMT)

Congress Votes to Extend Bush's Tax Cuts

Sep 27, 2004 by Guest Blogger

The House and Senate voted overwhelmingly on the evening of September 23 to extend three tax cuts amounting to $146 billion total, with $13 billion set aside for a variety of business tax breaks. Because the costs of the tax cuts are not offset at all, many believe that they will end up hurting the middle class in the long run.

The Center on Budget and Policy Priorities released a report highlighting how the "middle class" tax cuts will likely end up making the middle class net losers, once the cost of paying for the tax cuts is considered. The report can be read here.

The legisltation, which was passed 92-3 in the Senate and 339-65 in the House, extends the $1,000 per-child tax credit and tax breaks for married couples, and prevents the 10 percent income tax bracket from being applied to smaller amounts of earned income. The legislation also extends alternative minimum tax relief for one year.

Click here to read a Washington Post article with further details on the new tax legislation.

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CBO Updates Budget Estimates: Massive Deficits to Grow

The Congressional Budget Office today released its semi-annual update on the nation's budget situation. The report confirms massive deficits for the current year and beyond. In addition, the report shows that deficits will not be "cut in half" in the next five years, as projected by the Bush administration.

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Mid-session Review Presents Misleading View of Nation's Finances

The White House's Office of Management and Budget recently (and belatedly) released its annual budgetary "Mid-Session Review," which attempts to put a positive spin on massive and worsening deficits, as well as the lowest level of revenue in nearly a half century.

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Tax Cut Extensions Possible

We reported earlier that Senate Finance Committee Chairman Charles Grassley (R-IA) wanted to delay until September consideration of extending the "middle-class" tax cuts -- marriage penalty, expansion of the 10% income tax bracket, and the $1000 child tax credit -- that will expire on December 31. However, the Bureau of National Affairs (BNA) reported July 12 that House and Senate leaders plan to consider the cuts late this week.

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Budget Resolution Update

As of June 1, there is still no budget resolution, even as the appropriations process is scheduled to begin.

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A Tax Cut a Week in the House

In spite of the "PayGo" logjam over whether or not tax cuts ought to be offset, which continues to prevent passage of a budget resolution, the House persists with its "a tax cut a week" schedule.

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Understanding the AMT (Alternative Minimum Tax)

The cost of "fixing" the Alternative Minimum Tax (AMT) is often mentioned as one of the "hidden" tax expenditures that must be addressed.

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Comparison of House and Senate Budget Plans

The budget resolution plan passed by the House Budget Committee is far worse than the Senate plan. Nevertheless, the "fiscal discipline" of both plans is based on huge cuts in domestic spending for programs and services that most Americans value in order to extend tax cuts to wealthier Americans.

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The Misleading 2005 Budget

It’s hard to know how much emphasis should be put on the president’s 2005 Budget. On one hand, it lays out the president’s main policy objectives – mainly tax cuts for upper income individuals, increases in defense spending, and real cuts for many domestic services. On the other hand, the cost estimates, deficit forecasts, and other analyses are fundamentally misleading.

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