AMT Relief Act of 2007

AMT RELIEF ACT OF 2007 -- (House of Representatives - December 12, 2007)

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Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I might consume.

I rise in support of the AMT Relief Act of 2007. We are here again in an effort to protect 23 million American taxpayers from higher taxes on April 15. Almost 19 million of those taxpayers have never paid AMT before, and some indeed have not even heard of AMT. With this bill, we can ensure that it stays that way.

My district alone will see an increase from 7,300 families hit by AMT to 67,000 people hit by AMT. We have individuals across this country, including Maggie Rauh from my district who is a CPA and who testified that her family income is at $75,000. She takes the standard deduction. They have three children. She is going to pay AMT. That family trip to Disneyland next year is on hold.

Joel Campbell of Loudoun County, Virginia told the committee that his family had to choose between saving more for retirement or paying for college. Higher taxes because of AMT are forcing middle- and upper middle-income families to make these difficult choices.

So we all agree that AMT should not be affecting these working families, but we cannot agree on how to do it. And that is the point: Everybody agrees that it has got to be fixed. The Republicans propose to borrow $50 billion; we intend to proceed with paying for this issue. When I hear the argument that we should forget about it because it was never intended to hit middle-income people, as Mr. Rangel noted, I would like to try that on my creditors.

The Republicans believe that we should not offset this tax increase for middle-income people. Indeed, the President's budgets for the last few years have all counted on this revenue, and he projects next year precisely the same thing.

We made a pledge earlier this year to the American taxpayer that we would do no harm to the Federal budget. So if we lower tax revenues, we have to make up for that loss and not add to the deficit. That PAYGO pledge is difficult and painful, but most sensible.

The bill that we bring before the House today is a smaller package than before. The expiring provisions and the carried interest revenue raisers are gone. In the face of opposition to our offsets, we cannot retain this package because of the expiring tax provisions. It is my hope that we can turn to these provisions again in the near future and perhaps, if necessary, make them retroactive, indeed.

This bill provides that offshore hedge fund managers not enjoy unlimited deferral from any taxation on their compensation. We have all seen the news reports of these hedge fund people deferring hundreds of millions of dollars in compensation offshore because of a tax loophole. This bill closes that loophole, and it gives tax relief to 23 million families.

The bill also provides that a corporate tax shelter abuser be subject to new rules requiring economic substance in transactions. Let me interpret. It has to be for real. By cracking down on tax shelter abusers, we are able to provide tax relief to the families of 13 million children in minimum wage households who get little or no refundable child tax credits.

The bill is simple. The bill is straightforward. Despite some opposition, we are going to persevere in our path to responsible tax cuts. Ecclesiastes teaches us that the race is not always to the swift nor the battle to the strong. That does not affect our conviction here that we intend to persevere on the right path. We stand by our pledge to the American taxpayer and hope to convince others to join our battle today.

Mr. Speaker, I reserve the balance of my time.

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