Washington The House voted Wednesday to spare millions of middle-income families next year from a complicated tax invented in the 1960s to capture rich tax evaders.
The force of inflation is pushing more middle-income households into the alternative minimum tax each year. About 3 million individuals and families paid it this year.
The House voted 333-89 to prevent the tax from ensnaring 9 million more taxpayers next year and imposing $17.8 billion in extra taxes.
"The expected growth in the individual alternative minimum tax is a major problem in the tax code that must be addressed," Treasury Secretary John Snow said.
The House bill slows the tax's spread into the middle class by keeping the amount of income exempt from the tax at this year's level, $40,250 for individuals and $58,000 for couples. Without action, the exemptions fall back next year to $33,750 for individuals and $45,000 for couples. The bill will not become law until it is passed by the Senate and signed by President Bush.
The less affluent taxpayers stuck with an alternative minimum tax bill often have a combination of factors that work to lower taxes but are ignored in the alternative minimum tax system. These include high state taxes, unreimbursed employee expenses, numerous children or dependent parents.
The forms that test for this tax force taxpayers to run through a long series of calculations. Those who reach the end of the calculations and discover they owe the alternative minimum tax also find that the tax cuts passed during the Bush administration have disappeared.
Rep. Phil English, R-Pa., said the House bill "will ensure that Americans get the benefits of the marriage penalty relief, child credit and other tax relief we have provided during the past three years.
"If this bill is not enacted, it will amount to a tax increase on millions of Americans next year," he said.