Last week the U.S. House of Representatives approved an amended version of an Alternative Minimum Tax (AMT) fix put forward by Charles Rangel, Chairman of the House of Representatives Ways and Means Committee. Unfortunately, the bill is not expected to get the Senate’s approval because of a difference in opinions on how the legislation would be funded.

Experts expect the proposed legislation to reduce revenues by $50 billion. Eliminating a tax-code provision that allows hedge fund managers to defer income on some of their compensation by holding it offshore could partly offset the expected loss to the government.

"We have an opportunity to close a very unfair provision that we find in our tax code that certainly no one has come to me to defend," said Rangel. However, Republicans claim there is no need to offset the cost of a one-year patch since the government never intended the AMT to hit middle-class Americans. "Where we differ with the majority is over the question of whether we need to pay for the tax by raising other taxes," said Rep. Jim McCrery of Louisiana.

Democrats in the House claim the change would affect fewer than 10,000 taxpayers, and that failure to offset the budget impact leaves the federal government to borrow the difference. "So yes, tax relief for 23 million families, 10,000 or fewer people paying the price. What is the alternative? ... To borrow," said House Speaker Nancy Pelosi.