Finance to hold a hearing on the Bush tax cuts

Earlier in the year, tax writers in both chambers signaled that tax breaks benefiting the middle class enacted by President George W. Bush would be extended by the August recess. Absent congressional action, these tax cuts expire Jan. 1.

There has been little talk recently among Ways and Means members on extending the Bush tax cuts, sources close to the committee told The Hill. Members there have talked about extending for one year the Alternative Minimum Tax (AMT) "patch" that protects most middle-class taxpayers from the levy.

Without an extension of the patch, 20 percent of all taxpayers — 40 percent of married couples — will owe the tax in 2010 and pay about $90 billion in total taxes, according to the Congressional Budget Office.

If Congress fails to approve a patch for this year, about two-thirds of taxpayers with taxable incomes between $50,000 and $100,000 will pay the AMT — though the original intent of the tax was to ensure the wealthy paid their fair share.