Major Tax Issues in the 110th Congress (CRS Report for Congress)
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| Release Date |
Revised Sept. 3, 2008 |
| Report Number |
RL33768 |
| Report Type |
Report |
| Authors |
Jane G. Gravelle, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
During the first part of 2007, the most prominent congressional tax-policy action focused on small business. In May, Congress approved legislation (P.L. 110-28) increasing the federal minimum wage and providing small-business tax cuts. The tax cuts were partly designed to ease the adverse effect the minimum-wage increase was argued to have on small businesses.In the second part of 2007, a major focus of tax legislation was the alternative minimum tax (AMT) for individuals, which was projected to apply to a growing number of taxpayers. Under current law, individuals pay the higher of their AMT or regular tax. Unlike the regular tax, the AMT is not indexed for inflation, and rising prices, along with income growth and regular income tax cuts, have increased the AMTâ s scope. Congress has addressed the AMTâ s growth with temporary measures that restricted its scope with the latest scheduled to expire in 2007. Proposals to cut the AMT initially included other tax measures â both unrelated tax cuts and revenue-raising provisions designed to offset the impact of tax cuts on the federal budget deficit. As deliberations progressed, however, legislation focused increasingly tightly on the AMT, with a major concern of debate being whether to provide revenue-raising offsets. On December 19, Congress enacted the Tax Increase Prevention Act of 2007 (P.L. 110-166), whose only elements were AMT cuts.
