Bush child credit stiffs low-income workers

[Marlena]

Oopsie! Look what got chucked out of the new tax law as it emerged from conference!

http://www.nytimes.com/2003/05/29/politics/29CHIL.html

Most taxpayers will receive a $400-a-child check in the mail this summer as a result of the law, which raises the child tax credit, to $1,000 from $600. It had been clear from the beginning that the wealthiest families would not receive the credit, which is intended to phase out at high incomes.
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But after studying the bill approved on Friday, liberal and child advocacy groups discovered that a different group of families would also not benefit from the $400 increase — families who make just above the minimum wage.

Because of the formula for calculating the credit, most families with incomes from $10,500 to $26,625 will not benefit. The Center on Budget and Policy Priorities, a liberal group, says those families include 11.9 million children, or one of every six children under 17.

But hey, who cares? - these folks probably wouldn't vote Republican, anyway, and sure as hell don't have any money to donate to Bush's re-election campaign....

[hydrangea]

I just read this and came on to post it myself. It is un@#$#@#believable.

[Tracy]

If we were going to have a tax cut to give $1,000 to all these other kids, there's no reason not to include these kids, too," said David Harris, president of the Children's Research and Education Institute. "Their families are working and playing by the rules and are left out, though it would not have cost too much to include them."

I guess if GWB keeps saying... Leave no child behind, leave no child behind...and if he keeps saying he is compassionate, compassionate, compassionate...

well, if he says it enough I guess he believes people will believe him.

except for those who are hurt by him.

I don't get it.. those who defend him so much must be pretty rich.

[Arduinna]

yes, it totally sucks!!!

but honestly, I think that a certain percentage of people who will be hurt by this don't care. Because they view his other philosophies like anti abortion and anti freedom for amercians as ok because they agree with those.

it's the old " as long as he is against ______, then I don't care about anything else" syndrome :

[AmyB]

This is so infuriating.

The new Bush child tax-credit ammounts to a huge new entitlement program-- at a time when nobody is even sure how we will pay for existing entitlements like Social Security or Medicaid. It's one of those unfunded mandated that Republicans like to complain about unless they are the ones responsible for doing it.

Even worse, it's just an entitlement for the middle-class, not low income people who really need it.

All I know is that I'm going to take my "child tax credit" and send it straight to whomever is running against Bush in 2004.
I mean it too. I gave his $300 "tax cut" to my favorite environmental group. His bribes won't buy my vote.

--AmyB

[Delta]

They don't get the credit because they didn't pay the taxes in the first place.

If they got checks, it would be a handout, not a tax credit. And that is a different subject altogether, called welfare.

So, before you accuse mean ol' Bush of trying to starve poor children, please take into account the tax structure here.

[SummerLover]

d

[Els' 3 Ones]

I wish ppl would read the info before responding..............

The Senate provision that did pass was intended to help those families making $10,500 to $26,625 who do pay federal taxes and could have taken all or part of the $600 credit. The provision, which would have cost $3.5 billion, would have allowed those families to receive some or all of the extra $400 in the new law.

italics mine.

"I don't know why they would cut that out of the bill," said Senator Blanche Lincoln, the Arkansas Democrat who persuaded the full Senate to send the credit to many more low income families before the provision was dropped in conference. "These are the people who need it the most and who will spend it the most. These are the people who buy the blue jeans and the detergent and who will stimulate the economy with their spending."

Juxtapose this to Warren Buffett's view on the tax cut:

Instead, give reductions to those who both need and will spend the money gained. Enact a Social Security tax "holiday" or give a flat-sum rebate to people with low incomes. Putting $1,000 in the pockets of 310,000 families with urgent needs is going to provide far more stimulus to the economy than putting the same $310 million in my pockets.

When you listen to tax-cut rhetoric, remember that giving one class of taxpayer a "break" requires -- now or down the line -- that an equivalent burden be imposed on other parties. In other words, if I get a break, someone else pays. Government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the Senate handed the bill to the wrong party.

Supporters of making dividends tax-free like to paint critics as promoters of class warfare. The fact is, however, that their proposal promotes class welfare. For my class.

Dividend Voodoo

Throw in the thread posted today about the shelved deficit report ............ if you can't smell the stink of this tax cut you should get your nose checked.

[SummerLover]

sorry

[Els' 3 Ones]

[SummerLover]

I didn't think so El's. But I did look at Marlena's post and realize I'd done some repeating. I should have left it though. Can never have too much ranting, eh?! Then again, it's not really that difficult to understand why this is bad, is it?

[Devi]

Delta said~They don't get the credit because they didn't pay the taxes in the first place.

If they got checks, it would be a handout, not a tax credit. And that is a different subject altogether, called welfare.

So, before you accuse mean ol' Bush of trying to starve poor children, please take into account the tax structure here.

Delta, I assume you were not able to access the information. But this will indeed effect families that pay taxes. It will effect those with the greatest need. More of that good ol' compassionate conservatism, not leaving children behind, not determening policy based on 'focus groups' type stuff?????

My fear is that many others will also assume that this does not effect tax payers as you have.

[Marlena]

Delta, the tax credit is refundable. A refundable credit is one which, if the filer does not pay sufficient taxes to receive the entire benefit of the credit, the difference is refunded, or given to, the filer. This is a standard part of our tax system, with which one ought to be familiar before making blanket statements.

Please see the following for more information:

http://www.cbpp.org/5-28-03tax3.htm

The conference agreement does not accelerate the increase in the credit’s refundability percentage from 10 percent of earnings above $10,500 to 15 percent of earnings above this level. Such an acceleration was part of the Senate-passed bill but was dropped in conference.

For low-income families, the amount of the child tax credit often is limited by the amount of the credit that is refundable. Simply increasing the size of the credit to $1,000 does not increase the amount of the benefit for most of these families.

For example, consider a married couple with two children and $20,000 in income in 2003. Due to the standard deduction and personal exemptions, this family owes no income tax. Its credit is limited to the amount that can be received in refundable form. And that amount is limited to 10 percent of earned income above $10,500. Since the family has $9,500 in income above the $10,500 threshold, it is limited to a refundable child tax credit of $950 in 2003, which works out to $475 per child. In other words, this family is already unable to use the full $600 per child. Increasing the maximum credit amount to $1,000 does nothing for this family; its credit still cannot exceed $950 (10 percent of earnings above $10,500), or $475 per child.

What would have happened to this family if the child tax credit had been increased to $1,000 per child and the increase in the refundability percentage to 15 percent scheduled for 2005 had been accelerated, as would have occurred under the Senate bill? The family’s credit amount would be 15 percent of earned income above $10,500, or $1,425. This family would have received a tax cut of $475, rather than getting nothing.

[Joyce in the mts.]

El's 3 Ones...

I have posted lots more info on the "shelved" study. (Including access to a 55 page PDF file.)

I just wanted to provide all I could. I am still not sure that even all that additional info provides actual straight answers.

But, it is all very interesting. Remember when we had a HUGE surplus?...wow....times to change, eh?

That stink just keeps getting "louder" as my grandmother used to say...Joyce in the mts.

[Delilah]

The working poor DO pay taxes

They pay their 8% FICA, they pay 8.25% sales taxes in Texas (soon to be 9.25%), and they pay property taxes directly and indirectly, and ad valorum taxes. They pay a higher percentage of their income in taxes than the wealthy.

I don't see how they can dare to call themselves "compassionate".

[gurumama]

We got $3800 off our taxes in "welfare" in 2002.

It was the amount we saved from taking our $10,800 mortgage interest tax deduction.

"Welfare" is just another word for "money it's ok to give to corporations or higher income earners, but we begrude it when you don't earn enough".

edited for spelling

[gurumama]

Oh, yes, there's more welfare:

Once you reach an earnings cap of $80,000 or so, you DO NOT pay the 7% payroll taxes for Social Security. It just stops.

THAT is welfare too.

[noahsmum]

from the OP article

Most families with children who make about $30,000 or less are also eligible for the earned income credit, which the law does not not change. In addition, the law has a few other benefits for low income earners, like expanding the lowest tax bracket and a temporary reduction in the penalty on two-income couples.

Several centrist senators worked hard to make the child credit fully refundable for all low income families, and the full Senate voted this month to include a provision that would have included the minimum-wage families. But the provision was dropped in the House-Senate conference, where tax writers spent days trying to cram many tax cuts — most prominently, cuts in the taxes on stock dividends and capital gains — into a bill that the Senate said could not be larger than $350 billion.

House Republicans, who acknowledged the gap on the child credit, blamed the Senate for insisting on its $350 billion cap, saying the low-income families could have been covered had the Senate been more flexible.

A spokeswoman for the Republicans on the House Ways and Means Committee, Christin Tinsworth, noted that the provision was included in an agreement reached last week by Representative Bill Thomas, Republican of California, the committee chairman, and Senator Charles E. Grassley, Republican of Iowa, chairman of the Senate Finance Committee.

That agreement would have cost $380 billion, but it fell apart when an important swing senator, George V. Voinovich, Republican of Ohio, said he could not approve any bill that exceeded $350 billion. To satisfy him and the Senate, Ms. Tinsworth said, the child credit provision was dropped, along with other costs.

end article


Maybe the Dems should've initially agreed upon Bush's first tax proposal and none of this would've happened. Something had to be cut from the tax plan. We made about $20,000 last year, which is beans considering where we live and we paid NO taxes. We actually got $750 through Earned Income Tax Credit for having a child. TAX CUTS ARE FOR PEOPLE WHO PAY TAXES.

[daylily]

This is so unfair, I can't stand it. So, someone who cleans hotel rooms 8 hours a day is less worthy than a nurse or a teacher?
No child left behind? Give me a break.

I remember one of the presidential debates in which Gore pointed out that Bush's proposed tax cuts would mostly benefit the wealthy, and Bush's response was that the people who "work harder" "deserve" the tax breaks. I'm not sure how he came to the conclusion that people with more money work harder.

[Els' 3 Ones]

Originally posted by noahsmum

Maybe the Dems should've initially agreed upon Bush's first tax proposal and none of this would've happened. Something had to be cut from the tax plan. We made about $20,000 last year, which is beans considering where we live and we paid NO taxes. We actually got $750 through Earned Income Tax Credit for having a child. TAX CUTS ARE FOR PEOPLE WHO PAY TAXES.

Maybe the Dems???????? The elephants have control, or have you forgotten? Every single quote above was from an elephant. You quoted yourself, it fell apart when Voinovich wouldn't vote. What was his affiliation again?

curious..............very curious.................


El