A competing tax plan from the House means debate over tax cuts will be postponed until 2006.
http://www.nytimes.com/2005/12/14/politics/14cong.htmlDecember 14, 2005
Cut in Minimum Tax Not Likely, Lawmaker Says
By CARL HULSE
WASHINGTON, Dec. 13 - Senator Bill Frist, the majority leader, said Tuesday that Congress was not likely to act this year to shield millions of middle- and upper-income taxpayers from a larger income tax bite as lawmakers moved into the final days of the session with many major issues hanging in the balance.
In laying out what he hoped to accomplish before adjourning for the year, Mr. Frist, Republican of Tennessee, said that "in all likelihood" the Senate would not try to reach agreement with the House on competing $30 billion plans to reduce the impact of the alternative minimum tax. The tax, originally created to prevent the rich from escaping tax liability, is expected to reach another 15 million Americans next year because of inflation.
Mr. Frist's position means it is likely that Congress will also delay until 2006 a larger debate over nearly $100 million in tax breaks that Republicans say are essential to economic growth. But the House and Senate have taken different approaches on tax relief, with the House extending lower tax rates on investments while the Senate balked because of opposition from Democrats and Republican moderates.
The so-called patch for the alternative minimum tax could still be approved next year and made retroactive to cover taxes for 2006, and Republicans have indicated that they intend to take some action. The new impact of the tax on some families with incomes below $100,000 and most of those with incomes between $100,000 and $200,000 would be reflected in taxes due in 2007.
In the House, which last week passed a separate plan to ease the alternative minimum tax in an effort to entice the Senate into tax negotiations, Representative Roy Blunt of Missouri, the acting majority leader, said he thought a deal could still be reached. But he acknowledged that Mr. Frist was the best judge of what would be possible in the Senate.
Democrats attacked the decision, saying the Republican majority was stalling action on one piece of tax relief that benefited the less affluent. "This should have been our No. 1 tax priority and instead, because of right-wing ideological objectives, the middle and upper class will suffer and only the very, very wealthy will benefit," said Senator Charles E. Schumer, Democrat of New York.<snip>