Joe Pitts, December 14, 2007

As Christmas approaches, and the legislative year comes to a close, the incompetence of this Congress brings an old phrase to mind, with a slight modification. What you don't know can increase your taxes, or at least delay the government's return of money that is rightfully yours. The first year of the 110th Congress has been nothing but dysfunctional.

There will be few legislative accomplishments to speak of during Christmas recess, but one of the most egregious non-accomplishments of this Congress has been its inability, or lack of desire, to fix the Alternative Minimum Tax, known as the AMT. Many people know nothing of the AMT, and everyone would be better off if they never had to learn about it, because it would mean they wouldn’t be paying extra taxes.

The AMT was passed by Congress in 1969 to ensure that 155 ultra rich people did not use tax credits and loopholes to get out of paying their taxes. However, it was not indexed to inflation, and it now jeopardizes 50 million Americans, the great majority of whom are middle class families who hardly qualify as "rich."

In 1999, the Republican-led Congress passed an AMT repeal. However, President Clinton vetoed that legislation. Each year since 1999, Republicans in Congress made it a priority to ‘patch’ the AMT. This means they passed a law each year that would exempt the increasing number of middle class families that would otherwise fall under the tax law. This patch was usually passed by the end of each summer in order to allow the tax preparers, taxpayers, and the IRS sufficient time to know what the tax outlook for the year would be. It may seem like a minor detail, but it can take the IRS seven weeks to configure the computer systems and tax forms that are necessary to process the income tax each year.

By the end of October this year, the Democrat-controlled Congress had passed no such patch. At that point, Treasury Secretary Henry Paulson wrote a letter alerting Congressional leaders that if Congress did not pass legislation by November 16, the tax would have to be included on the forms that the IRS must begin to finalize at that point. November 16 came and went with no realistic attempt to fix this massive tax looming over middle class families.

Now, four weeks later, the House still has not presented a viable option for protecting middle class families from a tax meant for the wealthiest of the wealthy. The House has passed legislation that would deal with the issue, but they included massive tax increases in the bill. The Senate will not take up such a bill, and the President will not sign such a bill. Indeed, last week, the Senate passed a clean AMT patch, without permanently raising taxes, by a strong bipartisan vote of 88-5. Yet Democrat leaders in the House have let another two weeks pass without taking up consideration of the bill.

Now the tax returns of 50 million Americans, including those who have no involvement with the AMT, will be delayed -- possibly up to 10 weeks. Congressional leaders have two choices at this point: leave the AMT and make middle class families pay a tax meant for 155 of the richest Americans, or pass an AMT patch and force the IRS to reconfigure their tax forms and computer programs, which will mean a delay in tax processing as well as a delay in tax returns back to the public. This problem could have been solved before it ever became a problem. Congressional leaders knew about the AMT in January when they took control of Congress. By waiting until the week before Christmas, they have forced themselves between a tax and a hard place.

Because of the gross negligence of Democrat leaders in the House in dealing with the issue, millions of families will not be receiving their tax returns on time. At a time when American families are being pinched by rising prices at the pump, increased costs for healthcare, and even rising food prices, the last thing Congress should be doing is keeping hard earned money that rightfully belongs to the overburdened taxpayer.

Congressman Joe Pitts, a Republican, represents Pennsylvania's 16th Congressional District, which includes Lancaster County and parts of Chester County and Berks County.