From time to time my office distributes press releases and written statements on state and national issues, debate in the Senate, and legislation that I am working on. For your convenience, I post these documents on my site for your review.
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Sen. Sessions Introduces Legislation to Reduce Tax Burden on Working Families
Sessions’ bill, the Saving Families First AMT Relief Act of 2007, would allow taxpayers to claim personal exemptions under the AMT to reduce their taxable income subject to the alternative tax rules.
Current law prevents AMT taxpayers from claiming personal exemptions, as most taxpayers do under normal tax provisions. The personal exemption in the 2007 tax year is $3,400 per person.
“By allowing personal exemptions under the AMT, we will be providing tax relief for the hard-working American families that deserve it the most,” Sessions said. “The real solution to the AMT problem is comprehensive tax reform, but there is little appetite in Congress for such an effort. Until major reform becomes a reality, my bill will provide a more permanent, pro-family solution to the AMT problem.”
Nineteen million additional Americans are now subject to the onerous AMT after the expiration of a temporary “AMT patch” last year. Without new legislation, these taxpayers will face significantly higher tax bills during next April’s tax season.
Sessions’ legislation would also index the AMT exemption to inflation starting in 2008, eliminating one of the primary reasons why more Americans are vulnerable to the AMT.
The Alternative Minimum Tax was instituted in the late 1960s to prevent wealthy taxpayers from avoiding any tax liability. However, a larger number of middle-class taxpayers have been forced to pay higher taxes under the AMT each year because the AMT exemption was not indexed for inflation.
Democratic leaders in the Senate are reportedly hoping to pass another AMT patch by the end of the year. In addition to saving the U.S. Treasury billions of dollars compared to such a temporary fix, Sessions’ legislation would provide a more permanent, principled solution to the AMT problem.
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