Concerns About the State of the Economy Are Not a Good Reason to Waive PAYGO For AMT Relief

Publication Date: December 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Aviva Aron-Dine

Research Area: Banking and finance; Economics

Type: Report

Abstract:

Several weeks ago, the House of Representatives passed legislation that would provide Alternative Minimum Tax relief for 2007, extend other expiring tax provisions, and offset the cost with various revenue-raising measures. Some have argued that Congress should instead waive its Pay-As-You-Go (PAYGO) rules and deficit finance the cost of the AMT package. Recently, some advocates of this view have offered a new justification for their position. Including offsetting revenue measures, they claim, would dampen AMT relief's positive, stimulus impact on a possibly weakening economy. Even if this were a valid concern with respect to some types of revenue-raising provisions, it does not apply to the revenue raisers included in the House-passed AMT patch bill.