May 14, 2007, 7:39 pm
Grassley Predicts Huge Tax Increase on Wealthy
Sarah Lueck reports on the AMT.
As House Democrats move toward unveiling a proposal to permanently fix the alternative minimum tax, Republican Sen. Charles Grassley predicted the income tax rate for the wealthiest Americans would have to jump to 46% from 35% to offset the cost.
Democrats are trying to change the AMT to shield all households earning less than $250,000 from paying it. Grassley, in a floor statement today, said the result would be a shocking tax increase for the wealthy.
House Democrats, led by House Ways and Means Chairman Charles Rangel and Rep. Richard Neal (D., Mass.), aren’t considering such a large increase in the top tax rate, but they are talking about raising it. In addition, the plan would require taxpayers with incomes between $250,000 and $500,000 to continue paying the AMT, albeit in lower amounts than they have in the past.
Democrats have yet to publicly unveil details of their proposal. They characterize it as helping 87 million people by rescuing many from the AMT and beefing up tax credits geared toward those with lower and middle incomes and raising taxes on about one million.
