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On High-Stakes Hearings Begin on AMT Reform:
Q
I am following the AMT situation closely because my husband and I are getting more burdened with it every year. Even in retirement, it gets worse. We were hoping for some relief by a one-time fix in 2007. Did you get a sense that this will happen before the end of the year?
A
James A. Klotz responds:
While Rep. Charles Rangel, chairman of the House Ways and Means Committee, indicates he is not interested in a one-time fix for the AMT this year, it is very hard to believe that anything else will occur until after the 2008 election. The votes for AMT reform are there, but there is no consensus as to how the revenues generated by the AMT would be replaced. I think Rangel will use this year’s debate as a means to test various revenue raising proposals.
What this likely means is that a one-year patch will be passed again since Congress will not want to face angry voters in 2008. Rather, should the Democrats increase their majority and win the presidency, overall reform would be addressed at that time with a better chance of passing. Of course, we have no way of actually knowing how Congress will deal with this issue this year, but this is what we see as the most likely scenario.
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