January 09, 2007

CRAPO WANTS OUTDATED TAX OFF THE BOOKS

Idaho families, farms hurt by Alternative Minimum Tax (AMT)

Washington, DC â?? Idaho Senator Mike Crapo, a member of the Senate Finance Committee, wants to put an end to an outdated tax that is now taking aim at the countryâ??s middle class. Crapo is co-sponsoring legislation that will end the individual Alternative Minimum Tax (AMT), a tax which was implemented nearly forty years ago in an effort targeted at 155 wealthy Americans who were able to legally avoid owing any income taxes. â??With inflation and other issues, the AMT now affects millions of middle-class taxpayers, families and farmers, who were clearly not the original targets of the tax,â?? Crapo said. â??The AMT is out of control because it doesnâ??t allow for personal exemptions for children and deductions for state and local taxes. In effect, the AMT is a 26 percent regressive tax and was never intended to reach middle-class taxpayers, but that is exactly what it is doing. Now is the time to repeal it in its entirety.â??Crapo joins Finance Committee Chairman Max Baucus (D-Montana) and Ranking Member Charles Grassley (R-Iowa) in sponsoring the bill to repeal the tax. â??The AMT is the tax paid when the government determines, through a complicated formula, that you havenâ??t paid enough federal tax in relation to your income,â?? Crapo explained. â??The AMT may have worked in 1969, but now, nearly forty years later, itâ??s failing in its original intent. If the Congress does not act, by 2010 the AMT will exceed revenue from the regular income tax by $95 billion.Crapo listed two examples of the consequences of the AMT:â?¢A single parent with three children making less than $100,000 was eligible to file a simple tax return because he/she had no itemized deductions. The fact he/she claimed children as dependents required he/she to pay the AMT. â?¢A married couple with four children and one in college both worked outside the home. They were required to pay AMT equal to their entire interest and dividend income for the year, in effect, invoking a 100% penalty for wisely investing their hard-earned money.# # #