Sunday, November 14, 2010

Stupid, stupid, stupid

Leaders from both parties in Congress vowed Tuesday to spare more than 21 million taxpayers from significant tax increases when they file their returns next spring by adjusting the alternative minimum tax before the end of the year.

The tax was first enacted in 1969 to make sure higher-income taxpayers could not use deductions and credits to avoid paying any federal income tax. The income limits, however, were not indexed for inflation, so Congress routinely fixes the AMT each year to spare millions of middle income taxpayers from tax increases that would average about $3,900.

Congress hasn't made the change for 2010. In a letter to the IRS, Democratic and Republican leaders of the tax-writing congressional committees said they would address the issue after Congress returns next week in a lame-duck session.

Congressional Democrats could have done this alone, before the election, taken credit for a tax cut, and maybe saved a few seats.

Instead, by passing it in the lame duck session, Republicans will get the credit from the public.

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