October 22nd could be an interesting day in Washington. That’s when House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., expects to introduce two separate tax bills.
One will be an extender bill which will also include an AMT “patch” designed to keep 20 million or so Americans out of the clutches of AMT next year. That bill will reach the House floor before adjournment in mid-November, Rangel said.
The second piece of legislation will be Rangel’s anticipated AMT reform bill, which would include provisions to totally eliminate AMT. This second tax bill, which isn’t expected to get any serious consideration until sometime in 2008 would also cut taxes for about 90 million Americans, lower corporate tax rates and close many tax loopholes that businesses currently enjoy. Rangel intends to take his time with this bill, visiting with business and consumer groups in 2008 to drum up support for the measure.
Both bills will be revenue-neutral, according to Rangel, who downplayed any suggestion that lawmakers should waive the House’s pay-as-you-go rules that require spending and tax cut bills to be fully offset. He said that changing the tax code to require that hedge fund operators be taxed at ordinary income rates, rather than capital gains rates, is just one possibility out of many that lawmakers are considering to raise revenues.
Rangel also suggested that cutting corporate tax rates and closing tax loopholes might be seen as a tax increase by businesses since, under the current tax system, those loopholes result in many corporations avoiding all taxes. Rangel said that he and Treasury Secretary Henry M. Paulson, Jr., are “close to reading from the same page” on corporate-tax changes.