Interesting Tax Report in today’s Wall Street Journal:

Democrats in charge of congressional tax committees will have to scramble next year to prevent millions of additional taxpayers from being ensnared by the alternative minimum tax. Relief from the tax, also known as the AMT, is a top priority for incoming House Ways and Means Committee chairman Rep. Charles Rangel (D., N.Y.) and incoming Senate Finance Committee chairman Sen. Max Baucus (D., Mont.). Mr. Rangel says he wants to address the AMT, "which holds hostage 23 million people who have a tax burden on them that was never intended." …

The combination of an AMT fix and changed budget rules will likely push other priorities, such as estate-tax overhaul, far down the list. But it’s too early to declare the estate-tax issue dead, particularly since key Senate deal makers won promotions. Mr. Baucus, who will be chairman of the finance panel, has proposed a compromise to boost the estate-tax exemption to $5 million for individuals and $10 million for couples. (It’s currently $2 million and $4 million, respectively.)

The calendar is one factor pushing a compromise. President Bush’s 2001 tax bill reduces the estate-tax rate — now at a maximum 46% — until 2010, when the tax is repealed for a single year. If that law isn’t renewed, the tax returns the following year at pre-2001 levels: at a maximum 55% rate with a $1 million exemption for individuals. New finance committee members Sens. Maria Cantwell (D., Wash.) and Ken Salazar (D., Colo.) favor some form of permanent compromise. Mr. Salazar told reporters last week he and Mr. Baucus "agreed that it’s something we need to fix."

Several experts argue the politics are in favor of a compromise. "It’s actually a very strong bipartisan issue," says Ed McClellan, a partner at Alston & Bird LLP and a former top Republican finance committee staff member. Mr. Rangel had previously proposed an estate-tax compromise, although this was primarily in response to Republican efforts to completely repeal the tax. In 2000, he proposed cutting estate taxes by 20%; now he favors raising the estate-tax exemption to a maximum $7 million for couples, from $4 million, but would keep the top rate little changed from the current 46%. But Mr. Rangel clearly is going to focus his energies on AMT, and any action on the estate tax will likely originate in the Senate Finance Committee, experts say.