WASHINGTON - Congressman Eliot Engel of Westchester and Rockland counties is calling for reform of the Alternative Minimum Tax (AMT) to be part of President-elect Barack Obama’s plan to help struggling middle class families deal with the economic crisis. 

By making previous “patches” to the AMT permanent, millions of Americans will get real tax relief, said Engel.

“I am proposing to scrap the entire system and I felt since the government is now spending hundreds and hundreds of billions of dollars to bail out everyone in sight, that we ought to take some of that money and do a permanent fix, abolish the AMT and find some more equitable system,” he said.

Last year, a one-year patch to the AMT became law, increasing the income exemption to $46,200 for individuals filing and $69,950 for married couples. The AMT was initially created to ensure that high-income individuals and corporations, who pay little or no taxes under the regular tax system, through use of deductions, credits or other tax breaks, pay their fair share of taxes. But it did not index the exemption amount for inflation and now thousands of middle income families are penalized by it.

There was an estimated 2.8 million New Yorkers subjected to the AMT according to a July 2008 Congressional study.