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Donna Edwards on Tax Reform

 


Voted YES on extending AMT exemptions to avoid hitting middle-income.

Congressional Summary: Amends the Internal Revenue Code to:
  1. increase and extend through 2008 the alternative minimum tax (AMT) exemption amounts;
  2. extend through 2008 the offset of personal tax credits against AMT tax liabilities;
  3. treat net income and loss from an investment services partnership interest as ordinary income and loss;
  4. deny major integrated oil companies a tax deduction for income attributable to domestic production of oil or gas.
Wikipedia.com Explanation: The AMT became operative in 1970. It was intended to target 155 high-income households that had been eligible for so many tax benefits that they owed little or no income tax under the tax code of the time. However, when Ronald Reagan signed the Tax Reform Act of 1986, the AMT was greatly expanded to aim at a different set of deductions that most Americans receive.

The AMT sets a minimum tax rate of 26% or 28% on some taxpayers so that they cannot use certain types of deductions to lower their tax. By contrast, the rate for a corporation is 20%. Affected taxpayers are those who have what are known as "tax preference items". These include long-term capital gains, accelerated depreciation, & percentage depletion.

Because the AMT is not indexed to inflation, an increasing number of upper-middle-income taxpayers have been finding themselves subject to this tax. In 2006, an IRS report highlighted the AMT as the single most serious problem with the tax code.

For 2007, the AMT Exemption was not fully phased until [income reaches] $415,000 for joint returns. Within the $150,000 to $415,000 range, AMT liability typically increases as income increases above $150,000.

OnTheIssues.org Explanation: This vote extends the AMT exemption, and hence avoids the AMT affecting more upper-middle-income people. This vote has no permanent effect on the AMT, although voting YES implies that one would support the same permanent AMT change.

Reference: Alternative Minimum Tax Relief Act; Bill H.R.6275 ; vote number 2008-455 on Jun 25, 2008

Minimum tax rate of 30% for those earning over $1 million.

Edwards co-sponsored Paying a Fair Share Act