What: All Issues : Fair Taxation : S Con Res 70. (Fiscal 2009 budget resolution) Conrad of North Dakota amendment that would allow for future legislation that would return the Alternative Minimum Tax (AMT) to pre-1993 levels/On agreeing to the amendment (2008 senate Roll Call 44)
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S Con Res 70. (Fiscal 2009 budget resolution) Conrad of North Dakota amendment that would allow for future legislation that would return the Alternative Minimum Tax (AMT) to pre-1993 levels/On agreeing to the amendment
senate Roll Call 44     Mar 13, 2008
Progressive Position:
Yea
Progressive Result:
Win

This vote was on an amendment that would adjust the budget resolution for fiscal 2009 to allow for the eventual enactment of legislation that would roll back the Alternative Minimum Tax (AMT) to pre-1993 levels. It would do this by establishing what is known as a “reserve fund.”

The budget resolution sets overall spending targets for the Appropriations committees and outlines other budget rules.  When Congress violates these rules – such as allocating more money for a program than what it had set out in the budget resolution – the measure can be defeated on a procedural motion.  However, the budget resolution also typically contains several “reserve funds” that provide some spending flexibility for certain designated programs.  Reserve funds allow Congress to adjust the funding levels for some programs even after the budget resolution is enacted into law, as long as the House and Senate Budget committees agree to the change. This allows Congress to potentially spend more money on these programs than it had intended when Congress passed the budget resolution, without violating budget rules. 

Conrad said his amendment would have the effect of allowing the AMT to be fixed for some 20 million families that would otherwise be subject to the tax.  Devised in 1969, the AMT was intended as a way to capture more tax revenues from a handful of very wealthy people so adept at using loopholes that they paid little into the federal treasury. But the program has come under scrutiny in recent years, because an increasing number of middle-class taxpayers have found themselves subject to the tax.  This is largely because the AMT’s formulas do not account for inflation or recent tax cuts.

Most everyone agrees that the AMT is affecting too many people unfairly and needs to be changed.  But the AMT brings in a considerable amount of tax revenues that Congress spends from year to year and deciding how to make up that lost revenue is a perennial sticking point when it comes to making any changes to the AMT’s formulas.

Republicans pushed against the amendment, saying it would not make up for the loss of tax revenue caused by exempting millions of people from the AMT.

“The reality is we are not going to increase taxes in order to pay for the relief that would be provided to taxpayers here,” said Jon Kyl, R-Ariz. “The question the majority would have to answer is: What taxes are you going to raise in order to pay for this rate reduction for the people who would otherwise pay the AMT?   There is certainly no suggestion that there is a spending cut in the offing. Therefore, what taxes would be raised to pay for this?”

The amendment was adopted by a vote of 53-46.  Every Democrat present voted for the amendment.  Of Republicans present, all but three voted against the amendment (Olympia Snowe and Susan Collins of Maine and George Voinovich of Ohio).  The end result was that the bill went forward with language that would allow for the AMT to be rolled back to pre-1993 levels.

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