Congressman Steve Israel (D) joined local financial experts and taxpayers today to announce a new effort to fix a stealth tax. The Alternative Minimum Tax (AMT) was instituted in 1969 in an effort to ensure that wealthy taxpayers could not manipulate the tax code to avoid paying taxes entirely. Unfortunately, it is now hitting more and more middle class families this tax season. Rep. Israel and Rep. Nita Lowey (D-Westchester/Rockland) are proposing legislation to change the tax code by increasing the AMT exemption to $100,000 and indexing it for inflation.

"More and more Long Islanders are getting a nasty surprise when they finish their taxes this year," Israel said. "They're having to pay more because of a stealth tax hitting middle class taxpayers. Though this tax was meant to apply to the very wealthy, it's now affecting cops, nurses and teachers. That is not fair; it's not right; and middle class taxpayers simply cannot afford to wait for relief. Congress and the Administration need to pass get it done now. That is why I've introduced this legislation with Congresswoman Lowey."

Lowey added, "Unfortunately, what started out as a way to keep taxes fair has over time become a burden on ordinary, middle income families. The AMT is rapidly becoming a MCT - a middle class tax. Our legislation will restore the AMT's original purpose by indexing it to inflation so it won't hurt middle-income families in the future. I look forward to working with Congressman Israel to solve this problem once and for all."

The Alternative Minimum Tax (AMT) is a provision of the tax code originally meant to apply only to the exceptionally wealthy, but since it was never indexed it is suddenly gauging the unsuspecting and unprepared middle class. This year, more than 3 million taxpayers will be subject to the AMT. If the problem continues unfixed, over 30 million taxpayers will be forced to pay the AMT by the end of the decade. According to the National Taxpayer Advocate, in 2005, 65 percent of married couples with two or more children and with adjusted gross incomes of between $75,000 and $100,000, will feel the impact of the AMT, hardly the rich tax evaders this tax was meant to impact. In fact, the AMT may well be the largest middle class tax increase in history.

Congressman Steve Israel (D), a member of the House Armed Services Committee, announced the introduction of legislation to eliminate the pay gap many Reservists and National Guard members face when they are called to duty and lose their civilian salaries. The lost salary weighs heavily on recruiting efforts and adds significantly to the burden faced by many Long Island reservists, guardsmen and their families.

"The patriots who serve in the Reserves and Guard make tremendous sacrifices every day by being away from their families and risking their lives for our country; they shouldn't have to sacrifice their paychecks as well," Israel said. "The legislation I am introducing will help eliminate that pay gap and ease the burden on these brave men and women and their families."

"Bridging the gap between incomes during deployment makes all the difference for families trying to cope with the emotional and financial challenges put forth in front of them," added Family Bridges Foundation of Long Island founder Rhonda Daniels, whose husband Chris Daniels is serving in Iraq. "The only person thus far realizing this problem is Congressman Steve Israel."

Rep. Israel's legislation is a companion to legislation introduced by Senator Evan Bayh in the Senate. The bill would fully compensate 99 percent of Guard and Reserve members who have suffered a pay cut while serving their country and help ensure that no one serving will face a pay cut in the future. The legislation would provide a tax credit of up to $15,000 a year for companies that are already making up the salary difference for their Guard member-employees and would offer a direct payment of up to $50,000 a year to Reservists whose companies cannot or will not make up the difference.

According to a Pentagon study, more than 40 percent of all Reservists reported a loss in income when they were called up for active duty, though the impact is likely much higher today, given the longer and more frequent deployments in Iraq and Afghanistan. Reservists whose families face financial hardship during their deployment may be less likely to re-enlist as a result of the Patriot Penalty. Reservists make up nearly half of the forces on the ground in Iraq, making their future strength essential to maintaining U.S. military power. However, Lt. Gen. Roger C. Schultz, the chief of the Army National Guard, reported at a House Armed Services Committee hearing in February that the Guard had met only 56 percent of its quota in January.