November 07, 2007

CRAPO CO-SPONSORS BILL TO REPEAL AMT, MAKE TAX RELIEF PERMANENT

Capitol Hill news conference planned on key tax bill

Washington, DC - Idaho Senator Mike Crapo is announcing legislation to end an unintended tax that could hurt up to 90,000 Idahoans this year, and prevent a major tax increase on all Idahoans in the next five years. The AMT Repeal and Tax Freedom Act is being heralded by Crapo and the bill's main sponsor, Senator John Ensign (R-Nevada) as a way to encourage greater economic growth by maintaining lower tax rates on capital gains and dividends. The bill also abolishes the unfair Alternative Minimum Tax (AMT).

"The AMT was never meant to affect the middle class, and up to 90,000 Idahoans could be punished if this legislation is not passed," Crapo said. "This bill also makes permanent the current lower income tax rate structure we enacted in 2001. If Congress does not act, the income tax rates for all Idahoans will go up in 2011."

Crapo noted the AMT was originally drafted in the late 1960s to make sure no one avoided paying federal incomes taxes. Because the AMT was never indexed for inflation, more and more middle-class taxpayers are now becoming ensnared by it.

"This bill has a double benefit of ending the AMT and stopping future tax increases for all Americans," Crapo added. "The legislation maintains the maximum tax rate of 15 percent on long-term capital gains and dividends. More than 20 percent of Idaho taxpayers report capital gains income or receive dividends. If we do nothing, taxes will go up for Idaho families investing for their children's future and for Idaho seniors who rely on dividends to supplement their retirement income."

Crapo also noted Treasury Secretary Henry Paulson has warned that the holdup of any action on the AMT could potentially delay tax returns next year. Other original co-sponsors of the AMT bill are Senators Pat Roberts (R-Kansas), Jim Bunning (R-Kentucky) and Gordon Smith (R-Oregon).