AMT patch is attached to Senate version of new stimulus bill
The Senate Finance Committee on January 27 approved its portion of an $825 billion economic stimulus bill, the American Recovery and Reinvestment Bill of 2009, and potentially boosted the total cost to nearly $900 billion after agreeing to include a one-year patch for the alternative minimum tax (AMT) for the 2009 tax year. Senator Max Baucus, (D-Mont), chairman of the committee, included the AMT patch in the face of Republican complaints that the package contains too much spending and not enough tax cuts, CCH reports. The final committee vote was 14 to 9.
The House version of the stimulus bill does not include a patch for the AMT.
Some House Democrats, including members of the Blue Dog Coalition, a group of 51 fiscally conservative Democrats, object to including the AMT fix in the stimulus legislation. Rep. Jim Cooper (D-Tenn.), opposes the patch unless tax increases or spending cuts are included to pay for it. "I'm not aware of the AMT [fix] having any stimulative effect," he said, according to the Washington Post.
But Congressional leaders and key members of the tax-writing Senate Finance and House Ways and Means committees would prefer to deal with the AMT, now rather than make it part of an end-of-the-session crush, as has happened in recent years, the Post reports. The 2008 patch was attached to the Emergency Economic Stabilization Act of 2008 (aka the Bailout Bill), which passed in October last year. Rep. Charles B. Rangel (D-N.Y.), the Ways and Means chairman, said that plans for including the AMT provision in the final legislation sent to Obama are "more than tentative."
Senate Finance Committee Chairman Baucus included other Republican proposals in the committee's portion of the stimulus bill. These changes include loosening net operating loss carryback requirements, extending the deferred business tax debt repayment period from four years to eight years, and expanding credits for broadband development and hybrid electric plug-ins, according to CCH. Bank acquisitions lost a tax break as Baucus restricted the utilization of Code Sec. 382 rules for transactions occurring after January 16, 2009. The provision raises approximately $7 billion in revenue.
The Finance Committee also cut some of the spending proposals in the House Bill.