Debate Over Tax Cuts Centers on the Rich [View All]

(forget terrorism, the AMT is a timebomb)

http://www.latimes.com/business/taxes/la-na-taxes7dec07,1,1745469.story?ctrack=1&cset=true

Debate Over Tax Cuts Centers on the Rich
More relief from the alternative minimum tax and low rates for dividends and capital gains get most of lawmakers' attention.

By Joel Havemann, Times Staff Writer

WASHINGTON — The tax-cut debate in Congress resumes today as a contest between the merely rich and the super-rich. Congressional leaders are working on a way to make winners out of both.

The Senate has passed a bill that, in the most costly of its many provisions, would include one more year of relief from the alternative minimum tax, which was added to the tax code in 1969 to prevent the wealthy from sheltering most of their income. Nearly half of the benefits of that provision, according to the nonpartisan Tax Policy Center, would go to taxpayers with incomes between $100,000 and $200,000.

Those are the merely rich.

The House will probably pass a bill, approved by its Ways and Means Committee, that would cut taxes by about the same amount as the Senate bill, but by different methods. It would leave the alternative minimum tax alone and instead extend for two years the historically low 15% tax rate on investment income.

The low tax rates that apply to dividends and capital gains — the profits on the sale of assets, such as stocks — are scheduled to expire at the end of 2008. More than half of the benefits of extending them through 2010, according to the Tax Policy Center, would be enjoyed by taxpayers with incomes of more than $1 million.

Those are the super-rich.

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