House Panel Likely to Approve Tax Bill, Despite Offsets

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http://www.cqpolitics.com/wmspage.cfm?parm1=5&docID=cqmidday-000002619803

House Panel Likely to Approve Tax Bill, Despite Offsets

Private equity executives, venture capitalists, multinational corporations and hedge fund managers would bear the brunt of the year-end tax bill heading toward approval in the House Ways and Means committee on Thursday.

The $79.4 billion bill will be completely offset, if the committee approves the substitute amendment being offered by Chairman Charles B. Rangel , D-N.Y.

The bill features a “patch” to the alternative minimum tax, which would prevent the one-time levy on high earners from expanding into the middle class and hitting an additional 20 million taxpayers in 2007. It also extends dozens of expiring tax provisions and enhances the refundability of the child tax credit.

Most of those tax benefits are non-controversial. The trickiest part has been determining the offsetting revenue, which is required under House pay-as-you-go rules.

House Democrats say it is fiscally responsible to provide offsets to prevent the revenue lost from the tax extensions from increasing the federal budget deficit. But Republicans contend that Congress never intended to allow the AMT to expand so much, so there is not really any revenue lost.

“We shouldn’t have to raise taxes on some Americans in order to keep other Americans from experiencing a tax increase due to Congress’ inaction,” the panel’s ranking Republican Jim McCrery of Louisiana said in a statement.