House drops the ball on tax package

Give the U.S. House of Representatives credit for postponing the alternative minimum tax time bomb in its latest fit of tax cut fever. Otherwise, this week's House actions mostly consist of more favors for the richest Americans at the expense of students and poor people.

One can only hope that the Senate will rein in some of the excesses of the House tax package that won approval on a 234-197 vote Thursday. The centerpiece of that $56.6 billion measure is an extension of the 15 percent rate on dividends and capital gains until 2010, at a price tag of $21 billion.

The Senate passed its own $68 billion tax cut last month, which includes a provision to prevent 15 million households from receiving a $30 billion tax increase next year under the alternative minimum tax. That tax targeted just 155 wealthy Americans when it was created in 1969 to prevent them from "zeroing out" their tax liabilities through excessive exemptions, credits and other deductions. But the tax was never adjusted for inflation and now menaces many middle-class citizens.

By going along with the Senate plan to keep the AMT wolf away from the door, the House displayed some political survival skills. That's about all the good news from the House, however. While its latest tax cut package appears at first glance lower than the Senate version, the upper chamber's bill includes $19 billion in offsetting tax increases, mostly aimed at oil companies and eliminating some tax shelters. The House bill has no such offsets.


http://www.denverpost.com/opinion/ci_3295641