Bloomberg- House Ways and Means Committee Chairman Charles Rangel proposed new legislation to curb the reach of the alternative minimum tax and curtail a tax break for hedge funds that defer incomeoffshore. The Bush administration threatened to veto the bill.<\/p>\n
The $53 billion proposal would also delay a 2004 law that allows companies flexibility in allocating interest expense worldwide to reduce taxes, and require companies to show that tax-reduction strategies have a true business purpose.<\/p>\n
With the proposal, which also expands the child tax credit, Rangel, a New York Democrat, extends a standoff between House Democrats who want to abide by pay-as-you-go budget rules and the Senate, which wants to rein in the minimum tax without boosting other levies. The delays mean millions of taxpayers’ refunds will be slowed next year, according to the Internal Revenue Service.<\/p>\n
“Senate Republicans have defined themselves as an obstacle to providing responsible AMT relief, suggesting that provisions in previous legislation were too controversial,” Rangel said in a statement. The new bill gives “the Senate one more chance to do the right thing and pass this critical tax relief without adding to the deficit.”<\/p>\n