Increasing quarterly estimated tax payments for those with adjusted gross incomes of more than $5 million (H.R. 1906)/On passage
house Roll Call 232 Apr 19, 2007
This vote was on companion legislation to a bill to give the citizens of the District of Columbia full voting rights in the House of Representatives and permanently expand the number of seats the House by two to 437. (See Roll Call 231.)
This legislation would increase the quarterly estimated tax payments for people with gross adjusted incomes of more than $5 million. The tax increase was designed to more than offset the cost of the two new lawmakers' offices and staff. The 1974 Budget Act requires that those costs be offset by either spending cuts or tax increases elsewhere in the federal budget (unless the House specifically votes to waive the act).
The Democratic leadership chose to bring the tax package up as a separate measure rather than rolling it into one bill because of a failed effort to pass two similar measures together as one bill in March. By including a tax provision, Democrats expanded what is known as the "germaneness" of the bill, meaning the scope of amendments that are considered sufficiently relevant to attach. This served as an opportunity for Republicans to seek to include an amendment on gun rights in the District, which included language aimed at killing the bill. This move created a parliamentary nightmare for Democrats, who ended up postponing a vote on the bill for a month. (See Roll Call 180.)
In order to avoid that problem again, Democrats separated the voting-rights bill and the tax legislation into two individual measures that would be immediately attached after the tax bill was passed. The tax legislation would require affected taxpayers to make estimated tax payments equal to 110.1 percent of their previous year's taxes or 90 percent of their anticipated taxes for this year, whichever was less. Under current law, those taxpayers were required to pay 110 percent of their previous year's taxes in an advanced payment.
Democrats such as Rep. John Lewis (D-Ga.) maintained that the legislation would not increase taxes for any individual, but instead changes "in a very minor way" the estimated tax payments that wealthy individuals (those with incomes of more than $5 million a year) are required to pay quarterly.
"No one will pay more taxes under the bill," Lewis said. "It makes a technical timing change to tax payments made by these individuals. H.R. 1906 is critical to the pay-as-you-go pledge of this Congress."
Rep. Phil English (R-Pa.) disagreed, saying that the measure was simply a back-door tax increase, representing "the first brick in a Chinese wall of tax increases."
"Generating revenue by assuming that Americans with more than $5 million in income will increase their annual withholding by one-tenth of 1 percent simply makes a mockery of PAYGO," he said. (Pay-as-you-go rules are also known as PAYGO.) "The majority is exploiting a statistical quirk in the way that the Joint Tax Committee does its revenue estimates, and will have accountants, not normally known for their high spirits and good humor, roaring with laughter all over the country."
English said Democrats would have had more credibility had they simply found a couple of million dollars to trim in a federal budget that runs in the trillions.
Fourteen Democrats joined all but three Republicans in voting against the legislation, but the Democrats still had the votes to pass the bill. Thus, by a vote of 216 to 203, the House approved a minor change to the way wealthy individuals estimate their quarterly tax payments, and the measure was attached to companion legislation giving residents of the District of Columbia full voting rights in the House of Representatives.
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