Individual Taxpayers Tell Committee of Pain Caused by AMT
WASHINGTON, D.C. – The House Committee on Ways and Means Subcommittee on Select Revenue held the second in a series of hearings on the Alternative Minimum Tax (AMT) today. Today’s hearing focused on testimony from individual taxpayers affected by the tax. Subcommittee Chairman Richard Neal (D-MA) issued the following opening statement:
“I call this hearing to order. Everyone, please take your seats.
“This is the second hearing of the Select Revenue Measures Subcommittee and again our topic today will be the Alternative Minimum Tax, or AMT.
“We’ve all seen those commercials where the parents tell the kids that this year, they’ll finally get to go to Disneyland. Well, imagine the follow-up conversation where the parents deliver the bad news that the AMT took away their trip to see Mickey. This is real life. These are the real economic consequences for middle-class working families who are told they owe more in taxes than they previously thought.
“Two weeks ago, we heard from Treasury, the Taxpayer Advocate, and two think tanks about the problems with the AMT. Today, we will hear from tax practitioners and from families who have been impacted by the AMT. And they will tell us that the AMT means no contribution for retirement, no savings for college, and no trip to Disney this year.
“After these hearings, it is my intention to confer with Chairman Rangel and with our Republican counterparts, Mr. McCrery and Mr. English, about what would be the best approach for this Committee in tackling this problem. It also our intention to confer with Secretary Paulson, as Treasury must also be a partner in any long-term solution to fix the AMT.
“As I stated at our last hearing, this is a bipartisan problem and it needs a bipartisan solution. It is a tax increase threatening 23 million Americans this year. And it will hit almost 30 million taxpayers by 2010, including virtually all families of four earning between $75,000 to $100,000.
“The annual “patch” just keeps getting more difficult and certainly more expensive each year. But long-term solutions seem even more difficult, if not impossible. St. Francis once said, “Start by doing what`s necessary; then do what`s possible; and suddenly you are doing the impossible.”
“So, that is what I am committed to do and I won’t accept the notion that it is too hard to try.
“Many of the Members of this Committee, know the pain and confusion of the AMT. We are very fortunate today to hear some first-hand accounts from hard-working families who have also been victimized by the AMT. Their testimony will illuminate and inform us on this issue. And I hope it will inspire us to action as well.
“So, let me welcome our witnesses today.
“From Loudoun County, Virginia, we have Mr. Joel Campbell, a father of two and an unfortunate victim of the AMT for the last several years.
“From Chicopee, Massachusetts, and a constituent, Ms. Margaret Rauh. Maggie is an experienced CPA and will tell us how her family will pay AMT this year if Congress fails to act.
“And, from Baltimore, Maryland, we have Mr. Michael Day, the President of the Baltimore County Professional Fire Fighters, Local 1311 of the International Association of Fire Fighters. Mr. Day is a father of three and represents the rank-and-file firefighters, many of whom have been hit by the AMT. He has been a firefighter in Baltimore County since 1985.
“We are also pleased to welcome our witnesses representing the tax practitioner groups today. Mr. David Lifson, the incoming President of New York Society of CPA’s. New York State has the dubious honor of having one of the highest AMT participation rates in the nation and I am sure Mr. Lifson has many clients also unhappy about this “honor.”
“And representing the American Institute of CPA’s, Mr. Joe Walloch, who is a CPA from Redlands, California. Of the 23 million potential taxpayers to be hit by AMT in 2007, more than four million of them are estimated to live in California.
“Finally, from Long Island, New York, we have Mr. Jon Nixon, a CPA, who will address the AMT problem for his clients, many which are small business owners.
“I look forward to all of your testimony today.”