New Schumer Data Shows A Record 202k Long Island Taxpayers Will Be Pickpocketed By Outdated AMT In 2007
Schumer's New Study Details Dramatic Rise of AMT Burden on Long Island, Making it Among Nation's Hardest Hit Areas - Number of Residents Affected will Soar from 155,480 in 2006 to 202,000 in 2007Unless Action is Taken, This Year AMT will Cost a Family of Five in Massapequa $8,640 and a Family of Four in Jamestown $5,040Schumer Introduces Comprehensive Legislation to Provid
Armed with a new study revealing that Long Island residents are among the nation's hardest hit by the Alternative Minimum Tax (AMT) and that the number of residents affected will soar in 2007 unless action is taken, today, U.S. Senator Charles E. Schumer unveiled a sweeping new package of middle class tax cuts. The extensive study, which was conducted at Schumer's request by Martin Cantor, Director of the Long Island Economic and Policy Institute at Dowling College, estimates that this year 202,000 Long Island residents will be ensnared by the AMT, compared to the 155,480 residents that paid the AMT in 2006.
To ease the tax burden for residents across Nassau and Suffolk counties, Schumer's comprehensive legislation will extend AMT relief for middle class families through 2008. The bill also eases the financial burden middleclass families shoulder to send their children to college and take care of aging parents.
"As middle class families across Long Island continue to feel the financial squeeze of affording a home, raising a family, and sending their children to college, the outdated and unfair AMT only tightens the noose further," said Senator Schumer. "This tax cut package includes simple and fair changes to our tax code that will lend middleclass families a muchneeded helping hand."
In the late 1960s, Congress added the AMT as a backstop to the income tax after it was discovered a number of extremely wealthy Americans had failed to pay income taxes in 1966. However, the tax was never indexed to inflation, resulting in thousands of middle and upper middle income families being unfairly subjected to it every year. The Bush Administration's tax cuts have only exacerbated the problem.
It is estimated that that by 2010, 30 million American taxpayers will face the AMT, up from 1 million in 1999. According to Schumer's study, New York State is the secondmost AMT impacted state in the nation, with the Long Island area one of the most impacted regions in the state. In 2004, the New York City metropolitan area contained 7 of the top 30 counties in the United States impacted by the AMT.
In 2004, Long Island had 91,932 tax filers affected by the AMT, the second most impacted AMT region in the country after the Stamford/Norwalk Connecticut region. In 2006, 155,480 Long Islanders were subject to the AMT and the number is expected to dramatically climb to 202,000 in 2007 with the direct economic impact estimated at up to $843 million.
To ease the financial strain that the AMT imposes on middleclass Long Islanders, today, Schumer, a member of the Senate Finance Committee, highlighted his Middle Class Opportunity Act which includes two years of relief for middle class families from the AMT. The plan will also provide targeted tax relief at key phrases of a family's life. Schumer said his legislation, which has already been introduced in the Senate, will financially assist a record number of middle class families across the Long Island currently trapped by the tax.
Schumer's Middle Class Opportunity Act will also aid families experiencing the financial strain of sending their children to school and taking care of aging parents. His legislation focuses on four critical areas where families are seeing skyrocketing costs.
" AMT Relief Families with incomes between $75,000 and $100,000, who fall into the AMT for the first time, would face a tax increase of nearly $1,000 eliminating the effects of any tax cuts received since 2001. The Middle Class Opportunity Act extends AMT relief through 2008, providing two full years of relief this year, rather than forcing Congress to go through the same exercise every year.
" Increasing the Child Tax Credit Schumer's legislation provides relief to families with new babies by doubling the child tax credit to $2,000 for the first year of a child's life or in the first year after a child's adoption. To help ease the burden of childcare costs, the bill offers a tax credit to cover 35% of childcare expenses for families earning up to $75,000.
" Help Pay for College In previous years, New York families have been eligible for the HOPE credit, the Lifetime Learning credit, and the tuition deduction. These provisions have provided real relief: 246,000 families took advantage of the HOPE credit in 2004, shaving $338 million off their tax bills, 294,000 claimed the Lifetime Learning credit, for a total of $301 million, and 326,000 New York families took the tuition deduction in 2004, deducting $868 million. Under the Schumer bill, these credits and deductions would be combined into one credit, with a maximum of $2,500 per student to help cover tuition, fees and course books.
" Caring for Aging Parents Schumer said that as baby boomers become senior citizens, one of the greatest issues, and burdens, facing middle class families is the ability to pay for the care of their aging parents. Seventy percent of people between the ages of 45 and 55 have at least one living parent, and almost half of women in that age range provide some form of support to an aging parent.
Right now, only families who have elderly parents living with them are eligible to claim the dependent care tax credits for expenses they face caring for elderly parents. The Schumer bill would ensure that all families who are caring for aging parents, whether they live with the family or not, would be eligible for the credit. Families caring for elderly families could save families an average of $200 per month with this credit.
At Schumer's request, the report was conducted by Martin Cantor, Director of the Long Island Economic and Policy Institute at Dowling College.
Previous Article Next Article