Chimpy threatens to veto a bill that would rescue 23 million members of the middle class from the Alternative Minimum Tax because it would make up for the lost revenues by making 50,000 millionaires pay the same tax rate as you and I.
House Democrats on Friday pushed through an $80 billion bill to block the spread of a dreaded tax on middle-income people. The White House and Republicans, protesting tax increases in the bill affecting mainly investment fund managers, maintained that it would never become law.
What is certain is that if Congress and the White House do not reach a compromise by the end of the year, anywhere from 21 million to 25 million middle-income taxpayers will be hit by the AMT, costing them as much as $2,000 in extra taxes.
The bill would bring in $25 billion over 10 years by taxing so-called “carried interest” as ordinary income. Critics say that it is unfair that private equity managers pay the 15 percent capital gains rate on profits from fees or services instead of the ordinary income tax rate of 35 percent for high earners.
Democrats argued that 23 million people in danger of getting hit by the AMT would be protected by tax changes affecting some 50,000 people earning carried interest.
The White House also said language in the bill to terminate an IRS program farming out delinquency cases to private debt collectors would subject it to a veto.