WASHINGTON, April 8 — House Democratic leaders, in an effort to upstage Republicans on the issue of tax cuts, are preparing legislation that would permanently shield all but the very richest taxpayers from the alternative minimum tax, which is likely to affect tens of millions of families as early as next year if it is left unchanged.

The effort, which lawmakers emphasize is still in its early stages, would exempt millions of people from the tax but would have to come up with a way to offset an enormous loss of revenue in the next decade. Measured in dollars, it would be far bigger than Democratic initiatives to provide money for children’s health care, education or any other spending program.

The alternative minimum tax was created in 1969 to prevent millionaires from using loopholes to avoid all federal income taxes. Under it, affected taxpayers have to do a second tax calculation without claiming popular deductions like those for state and local taxes that they have come to rely on. It is akin to a flat tax of 26 to 28 percent.

But the tax is expanding at a rapid pace, partly because it is not adjusted for inflation. It can hit people with incomes as low as $50,000 and if left unchecked is expected to affect 23 million households during the 2007 tax year — up from 3.4 million last year.