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Cracker Squire

THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Sunday, November 11, 2007

A real battle is brewing in Congress over the AMT. This much is for sure: Both parties risk the fury of voters if they don't pass a patch this year.

From The Hill:

Senate Republicans will launch a coordinated campaign next week to attack Democrats for dithering on legislation to shield millions of middle-class families from an unexpected tax hike and to convey stiff GOP resistance to raising taxes to pay for the relief, Senate GOP aides said.

Republicans already began the assault on Friday, hours before House Democrats approved legislation to stave off the Alternative Minimum Tax (AMT) for one year, voting to pay for the relief partly by raising taxes on investment managers in the private equity, hedge fund and real estate industries. The Senate has not yet acted to patch the AMT.

“The reality is that Republicans are not only blocking attempts to provide AMT relief but, audaciously, many are demanding additional tax breaks for the wealthy as a price for passing AMT relief. This is cynical politics at its worst,” [said Senate Majority Leader Harry Reid spokesman Jim Manley].

Republicans and Democrats both risk the fury of voters if they do not pass an AMT patch this year. Currently, only 4 million taxpayers pay the AMT, which Congress originally passed to ensure that the wealthy paid income taxes. But because the tax was never indexed to inflation, it is set to steadily swallow more and more middle-class victims. Unless Congress passes a patch, up to 25 million taxpayers could get hit by the tax next spring.

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