Wednesday, February 28, 2007, Senator Skelos sent letters to United States Senators Schumer and Clinton and Congressman Charles Rangel, Chairman of the United States House of Representative’s Ways and Means Committee, urging enactment of comprehensive reforms insulating hardworking, overburdened Long Island taxpayers from the federal Alternative Minimum Tax.
“At both the state and federal level, middle-class taxpayers are now subject to taxes that were intended for the wealthy few,” said Senator Skelos. “It’s tax time and many Long Island families have been shocked to learn that they must pay the AMT. This tax was never meant for hardworking, middle-class families and Congress has an obligation to fix this problem. Right now, suburban families are paying more than their fair share and that’s wrong.”
Enacted in 1969, the AMT was intended to preclude wealthy individuals from avoiding personal income tax liability through a series of legitimate deductions and credits. When coupled with other inequities that disproportionately impact New York State’s suburban taxpayers, the continued failure to index the AMT brackets for inflation has subjected relatively moderate-income Long Island families to this costly assessment. As noted by the TaxPolicyCenter, the additional tax burden imposed by the AMT averages $6,813.
Since 1969, the number of taxpayers affected by the AMT has risen from 20,000 to 3.8 million. Because the AMT brackets have never been updated, the AMT treats families earning $100,000 today and in 1969 equally—even though $100,000 in 1969 would be worth $549,046 today. According to Leonard Burman, Co-Director of the TaxPolicyCenter, “If you have children, if you pay high state and local income taxes, you’re going to be subject to the AMT. That’s the professional class in the Washington and New York suburbs, and Los Angeles and San Francisco. You can see it in the data.”