Wednesday, 27 July 2016
Last updated 1 hour ago
Dec 13 2007 | 9:12am ET
Setting up a potential battle with both the Senate and the White House, the House of Representatives approved a bill protecting about 20 million people from the alternative minimum tax but boosting taxes on hedge fund managers by billions.
The bill, which leaves out the controversial proposal—proffered in the version that passed the House last month—to double the tax rate on so-called “carried interest,” leaves intact a provision eliminating rules that allow some hedge fund managers to defer taxes on offshore compensation. Under the original bill, that plan would have raised an additional $22.7 billion over the next decade, while the AMT patch would reduce revenue by about $50 billion.
“We have an opportunity to close a very unfair provision that we find in our tax code that certainly no one has come to me to defend,” the bill’s sponsor, Rep. Charles Rangel (D-N.Y.) said. “Tax relief for 23 million families, 10,000 or fewer people paying the price. What is the alternative?” House Speaker Nancy Pelosi (D-Calif.) added. “To borrow.”
Republicans, however, do not sound convinced, arguing that the AMT was never meant to hit so many families, thus vitiating the need to offset the lost revenue. The White House has also threatened a veto.