WASHINGTON, DC – Earlier this week, Senate Majority Leader Bill Frist stated that the Senate would not pass an extension of the current Alternative Minimum Tax (AMT) exemption limits before next year.  Representatives Nita Lowey (NY18) and Steve Israel (NY2), who introduced a bill to permanently fix the AMT, wrote to Frist today to urge him to bring AMT legislation to the floor immediately.  If such legislation is not passed in 2005, millions of families will be adversely affected in 2006.

“We have known all year that Congress must pass an extension of current exemption levels, yet Senator Frist has not been able to find the time to put such a measure up for a vote in the Senate,” said Lowey.  “That is simply unacceptable.  Millions more Americans will be hurt by the AMT if we don’t act now.  I hope Senator Frist reconsiders and schedules a vote on the AMT.”

"The AMT was intended to ensure that the exceptionally wealthy paid their fair share of taxes, yet today it has turned into a stealth tax trapping middle class families," noted Representative Israel. "Cops, nurses and teachers are being hurt. We must pass the one year extension of AMT relief before Congress adjourns for the year."

The AMT was first designed in the 1960’s to ensure that the very wealthiest Americans paid some share of taxes.  However, failure to adjust the AMT to inflation has allowed its affects to creep into the pocketbooks of working families.  Temporary fixes have mitigated some of these effects, but if they are allowed to expire at the end of 2005, 15 million additional middle-class families will be forced to pay the AMT.  In fact, married couples with two children filing a joint return could have to pay the AMT even if they make as little as $67,500. 

New Yorkers will be hit especially hard.  In 2003, of the more than 2,350,000 Americans paying the AMT, nearly 15%, or more than 350,000, were New Yorkers.  If the percentage of AMT filers from New York remains the same, next year 2-3 million New Yorkers will be pulled into the AMT.

Representatives Lowey and Israel have introduced legislation to permanently reform the AMT by raising the income exemption to $100,000 and indexing it to inflation.  Today, they wrote to Frist to urge him to schedule floor action on the temporary fix already in place.

“It would be unconscionable for Members of the House and Senate to return home for the holidays having left middle-class Americans deserving of AMT relief out in the cold.  The proposed extension is neither complex nor controversial, and its passage requires only the will on your part to get it done,” wrote Representatives Lowey and Israel.

###

December 16, 2005

The Honorable Bill Frist
Senate Majority Leader
S-230 U.S. Capitol
Washington, DC 20510

Dear Senator Frist:

We are writing to express our exasperation following your recent announcement that you do not plan to bring the House-passed extension of higher Alternative Minimum Tax (AMT) exemption levels before the Senate prior to adjournment.  We strongly urge you to consider this legislation which would protect millions of middle-class Americans from being penalized by the AMT.

As you know, the AMT was designed in the 1960’s to ensure that the very wealthiest Americans paid some share of taxes.  However, failure to adjust the AMT to inflation has created a mammoth burden on working families.  If, as you propose, current exemption limits are allowed to expire, more than 15 million more middle-class families will be forced to pay the AMT.  Married couples with two children and a joint return will be subject to the AMT if they earn as little as $67,500, regardless of whether they itemize or take standard deductions.  This is both unacceptable and entirely preventable.

Congress has known all year that the current AMT exemption limits will expire at the end of December.  It would be unconscionable for Members of the House and Senate to return home for the holidays having left middle-class Americans deserving of AMT relief out in the cold.  The proposed extension is neither complex nor controversial, and its passage requires only the will on your part to get it done.

We hope that you will demonstrate leadership necessary to ensure an extension of current AMT exemption limits.  On behalf of millions of middle-class Americans, we appreciate your consideration.

Sincerely,

Nita M. Lowey                                     Steve Israel