November 2, 2007 (LPAC)--The House Ways and Means Committee, chaired by Rep. Charles B. Rangel (D-NY), approved yesterday, House Resolution 3996, The Temporary Tax Relief Act of 2007, a $76 billion measure to stave off the growth of the alternative minimum tax (AMT) that applies to anyone making over $75,000 a year, and has not been adjusted for inflation since its passage in 1969. The AMT would devastate 23 million middle-class wage-earners next year, Rangel maintains.

In addition, H.R. 3996 deals with investment funds managers. A press release from the Committee says, ``Under the Committee-passed legislation, they [fund managers] will no longer receive a lower capital gains rate of 15% for what is essentially a management fee or payment for services. Partners and managers would continue to receive a lower rate of taxation on returns derived from money they have {personally invested}. (Emphasis added). Rangel's Committee press also notes that the Committee reviewed existing tax codes and ``found no evidence to conclude that these partners or fund managers should receive preferential treatment for the same services provided by other corporate professionals doing the same jobs.'' In other words, their fees would be treated as taxable income, a move which produced shrieking from the hedge fund lobbies, such as the Private Equity Council, and its water-boy in the House of Representatives, Rep. Eric Cantor (R-VA). Cantor attacked Rangel for destroying future jobs with this tax, and the Private Equity Council, created by The Carlyle Group and other private financiers, said they will continue to block the measure from being passed in Congress.

This is the beginning of a fight on the overall updating of the U.S. tax code. A month ago, Rangel unveiled a far broader measure which he called ``the mother of all tax reforms,'' a blueprint to cut and simplify the taxes of the poor and middle class and eliminate the AMT, which was designed in the 1960s to prevent millionaires from using loopholes to avoid all tax liability. The Rangel plan would cut taxes for about 91 million families and provide a tax reduction to virtually every family with an annual income below half a million dollars.