U.S. House backs temporary middle class tax relief

WASHINGTON, Sept 24 (Reuters) - The House of Representatives on Wednesday approved legislation giving some 25 million mostly middle class taxpayers a temporary reprieve from paying a tax originally meant for the very wealthy.

The House voted 393-30 to provide alternative minimum tax relief through the end of this year at an estimated 10-year cost to the federal treasury of $64.608 billion.

House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, said in a statement that he would have liked to pass permanent AMT tax relief. But that would cost the federal treasury more than $700 billion over ten years and President George W. Bush and his Republican allies in Congress oppose raising other taxes to cover that cost.

The temporary AMT relief passed by the House on Wednesday includes no new revenues to offset the cost.

Rangel promised a comprehensive review of U.S. tax laws when the new president and Congress are sworn into office in January. "I look forward to hitting the ground running on tax reform with the next administration to rebuild our tax laws and reward hard working families that have been ignored recently," Rangel said.

On Tuesday, the Senate approved a broader tax bill that included incentives for alternative energy production and extended some expiring business tax breaks as well as providing AMT relief. The Senate would have to act on the House's version of the legislation before it could be sent to President George W. Bush and signed into law.

The House bill would also provide relief to workers who exercise incentive stock options. Exercising stock options can often trigger the AMT, requiring workers to pay the extra tax.

Also approved by the House, on a vote of 419-4, was a bill that would help victims living in federally declared disaster areas get tax relief. The action comes following a series of hurricanes, floods and other destructive natural disasters that have hit areas of the United States recently.