Advocacy Update: November 4, 2007
House Ways and Means Committee Approves Parts of "Mother" Tax Bill
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Michael Kerley
703-770-8155
The House Ways and Means Committee today started formal work on the “mother of all tax bills” that the Chairman of the Committee, Charles Rangel (D NY), introduced October 25, 2007. The Committee split off the parts of the “mother” bill focused on preventing a large increase in the number of taxpayers that will be subject the Alternative Minimum Tax in 2007. If no change in law occurs, the number of taxpayers subject to the AMT would rise from 4.2 million taxpayers to about 24 million. That result is simply unacceptable to the majority of members of Congress—particularly since the tax will be collected in an election year.
After a day of heavy debate and behind the scenes maneuvering, the Committee did pass along party lines a one year AMT “patch” just for 2007. In addition, the Committee voted to “extend” a number of tax provisions that have expired in 2007 unless Congress enacts new legislation. Under the “Pay-Go” budget rules that Congress passed last January, the AMT “patch” and the “extenders” had be paid for. That means that the approximately $75 billion in tax revenue loss that the bill marked up today (H.R. 3996) produces over 10 years must be made up by tax adjustments elsewhere. That is precisely what the committee did, adopting $76.5 billion worth of revenue raising revisions over 10 years.
The good news for NAIFA members is that it appears that none of the revenue raisers used to offset the AMT “patch” and “extenders” impact the core products or services provided by the insurance industry. But, long time Capitol Hill watchers know that in its present form this bill is by no means a done deal. It faces a number of hurdles both in the House and Senate as well as in the White House. Therefore, eternal vigilance is the watchword.