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Week Ending December 9, 2005

H.R.4096 To amend the Internal Revenue Code of 1986 to extend to 2006 the alternative minimum tax relief available in 2005 and to index such relief for inflation.

BRIEF

The Alternative Minimum Tax was created in the late 1960s to insure that very wealthy Americans could not avoid paying any income tax through loopholes and other mechanisms. Those individuals were required to pay a minimum amount.

Once impacting only thousands the AMT was soon to impact around three million taxpayers when the repeal was passed early in the Bush administration. That repeal would expire for 2006 without this bill to extend it for one more year. Reportedly, 15 to 20 million taxpayers would be impacted if the bill is not enacted because the amount triggering application of the tax was not adjusted for inflation.

The bill extends the repeal for the 2006 tax year and adjusts the trigger amount for inflation.

Sponsor: Representative Thomas M. Reynolds (R-NY-26^th)

Vote: Passed House 414 to 4 (RC 613) December 7, 2005

Cost to the taxpayers: $31 billion in lost tax revenue.

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