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Tax Credit EXCLUDES Thousands in Maine
MaineToday.Com ^ | Friday, May 30, 2003 | BART JANSEN

Posted on 05/30/2003 8:20:06 AM PDT by fight_truth_decay

WASHINGTON — Thousands of Maine families with low or moderate incomes won't qualify for the $400 child tax credit that more-affluent families will receive under the tax cut signed by President Bush. Republican Sen. Olympia Snowe and congressional Democrats criticized Republican congressional leaders Thursday for refusing to make low-wage earners eligible for the increased child tax credit.

In the tax-cut compromise struck by negotiators in a House-Senate conference committee, the increased credit was made available only to families that earned enough to pay taxes. In Maine, that means the parents of an estimated 40,000 children won't benefit from the credit.

"I am dismayed that conferees eliminated the refundable portion of the child tax credit from the jobs and growth package," said Snowe, a member of the Senate Finance Committee who opposed the final version of the tax cut. "This ill-founded decision creates a two-tier system under the child tax credit, penalizing low-income working families who need the help most."

As part of the 2001 tax cut, Snowe insisted that a $600 child tax credit be refundable to families earning at least $10,000. The requirement upset conservative lawmakers because it meant that minimum-wage families got a refund even though they paid no taxes.

This year's tax cut increased the child tax credit from $600 to $1,000 for each of the first two children in a family, but restricted eligibility. Also, the minimum income to claim the credit was raised by $500, to $10,500.

The result is that only families earning enough to pay taxes, or about $26,000, will benefit from the change. Higher-income families are expected to receive checks for $400 per child (maximum of two) in July and August.

Retaining eligibility for lower-income families would have added $3.5 billion to the $350 billion cut over 10 years.

The Center on Budget and Policy Priorities, a nonpartisan group that studies federal legislation, estimated that the change would prevent 12 million children nationwide from qualifying for a credit.

Snowe and Reps. Tom Allen and Mike Michaud, both D-Maine, voted against the $350 billion tax cut, arguing it would expand the deficit without stimulating the economy.

Sen. Susan Collins, R-Maine, voted in favor of the tax cut because it provided $20 billion in state aid, including an estimated $116 million for Maine.

Ari Fleischer, the White House spokesman, defended the tax cut Thursday, noting that it reduced tax rates on stock dividends and capital gains, and speeded up reductions in income tax rates. He argued that 3 million low-wage workers would no longer have to pay taxes at all because of the changes.

"This certainly does deliver tax relief to the people who pay income taxes," Fleischer said.

But Senate Minority Leader Tom Daschle, D-S.D., wrote Bush a letter Thursday urging the president to support legislation that would fix the problem for workers who earn too little to pay taxes.

"I hope the president will agree to reduce the tax breaks for the very wealthy in order to restore this tax relief for hard-working taxpayers who need it most," he said.

Staff researcher Julia McCue contributed to this article


TOPICS: Business/Economy; Culture/Society; Extended News; Government; News/Current Events; US: Maine
KEYWORDS: mikemichaud; snowe; susancollins; taxcut; taxreform; tomallen
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1 posted on 05/30/2003 8:20:07 AM PDT by fight_truth_decay
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To: fight_truth_decay
Isn't a "tax credit" for people who PAY TAXES? Some senators are just sooooo stoopid. We, the people, who PAY taxes are NOT quite that STOOPID!
2 posted on 05/30/2003 8:23:07 AM PDT by goodnesswins (For Lease.....)
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To: fight_truth_decay
OMG!!! Thousands of people who don't pay taxes won't get a tax cut!! Call a lawyer!
3 posted on 05/30/2003 8:23:20 AM PDT by So Cal Rocket (Free Miguel and Priscilla!)
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To: fight_truth_decay
I hope the president will agree to reduce the tax breaks for the very wealthy in order to restore this tax relief for hard-working taxpayers who need it most," he said.

By definition, a taxpayer is someone who "pays taxes". If you dont pay taxes, you dont get tax relief. A tax credit for those that dont pay (income) taxes is welfare, not "tax relief". Capiche?

4 posted on 05/30/2003 8:24:33 AM PDT by Nonstatist
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To: fight_truth_decay
Too bad, Olympia. If only there'd been a few more Senators supporting the tax cut. Maybe then the would have been enough room in the package for your priorities.
5 posted on 05/30/2003 8:24:49 AM PDT by caltrop
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To: fight_truth_decay
True liberalism at its peak!!!! Ms. Snowe wants money for people who pay NO taxes! Mother Government, she wants to give away all of our money. If she feels that way, let her give them her money.
6 posted on 05/30/2003 8:25:06 AM PDT by elephantlips
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To: So Cal Rocket
Thousands of people who don't pay taxes won't get a tax cut!! Call a lawyer!

I never understood the idea of a refundable tax credit allowing someone to effectively pay negative taxes. Under the Federal income tax system in place now they are paying $0 in Federal income taxes. They should be overjoyed, instead of whining.

7 posted on 05/30/2003 8:25:39 AM PDT by Numbers Guy
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To: caltrop
How do you get a refund if you never paid in the first place? Olymia Snow sux for votes.
8 posted on 05/30/2003 8:26:45 AM PDT by gathersnomoss
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To: fight_truth_decay
Now Bart, try to follow me here. I know it's difficult to understand but,

IF YOU DON'T PAY ANY TAXES, YOU CAN'T GET A CREDIT FOR TAXES PAID. YOU WON'T RECEIVE A REBATE CHECK BECAUSE YOU DIDN'T PAY ANY TAX.

Did I lose you again?

9 posted on 05/30/2003 8:27:00 AM PDT by LoneGOPinCT (From the Land of Liberalty. All we are saying is give pizza chants.)
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To: LoneGOPinCT
All those Somali votes in Lewiston; gone.
10 posted on 05/30/2003 8:29:33 AM PDT by widowithfoursons
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To: fight_truth_decay
The Earned Income Tax Credit is welfare for the working poor, period. If you don't have an income obligation to pay taxes but claim dependents, you get a subsidy from the government to help you keep breeding.

This same outcry occured with last summers' rebates. "How come I got no rebate check like real tax payers?"

It is to laugh....
11 posted on 05/30/2003 8:32:01 AM PDT by telebob
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To: LoneGOPinCT
One may actually receive credits in excess of the taxes paid. The earned income credit is a refundable credit and the child tax credit is refundable for some taxpayers. Under Code Sec. 24(d)(1),the child tax credit is refundable to the extent of the lesser of (1) the tentative child credit that was not allowed because it did not exceed the tax liability or (2) 10 percent of the amount by which the taxpayer's earned income exceeds $10,000. A different rule applies if the taxpayer has three or more qualifying children.
12 posted on 05/30/2003 8:34:03 AM PDT by TheCPA (Co-author of Tax Stategies for the Self-Employed)
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To: Numbers Guy
Under the Federal income tax system in place now they are paying $0 in Federal income taxes...

It would be nice it that were true. Actually, with the earned income tax credit, many people pay negative taxes. They want their negative taxes (refund)to be increased by $400 per child.

13 posted on 05/30/2003 8:34:29 AM PDT by Onelifetogive
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To: fight_truth_decay
Anyone who does not need the money that they get through the tax cuts should give it to those who need it. If you know a needy person, whether it be a family member, friend, neighbor or church member, you can spend these tax cut bonuses as you see fit and help the needy -- spending your own money. A lot of wasted paperwork and trees not having to be cut down to make the paper will be eliminated. This would also have the benefit of saving the environment. There should be more tax cuts to help more of the needy -- many more benefits than we have even thought about!
14 posted on 05/30/2003 8:35:47 AM PDT by Photo2003
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To: All
POLL: Should these families receive a check, even if many may not have paid taxes in the first place?
Yes
No
Vote
15 posted on 05/30/2003 8:36:36 AM PDT by fight_truth_decay
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To: gathersnomoss
I agree with you that those who don't pay taxes shouldn't (or couldn't) get a refund check from the government. Liberals, however, will argue that even those who pay no income taxes pay sales taxes and therefore have a refund coming.

My point, however, is that if she'd supported the tax cut she might have had some input in the final package.

16 posted on 05/30/2003 8:36:48 AM PDT by caltrop
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To: fight_truth_decay
TAX CREDIT
TAX CUT
Thousands of Maine families will not qualify for a $400 child tax credit because their income falls between $10,000 and $26,000. Should these families receive a check, even if many may not have paid taxes in the first place?

No: 73.85%

Yes: 26.15%

Total Votes: 260

17 posted on 05/30/2003 8:38:51 AM PDT by goodnesswins (For Lease.....)
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To: fight_truth_decay
penalizing low-income working families who need the help most."

Weren't taxpayers penalized on the front for taking up the "tax paying slack" for the the low income families who already got a break for NOT paying their fair share in the first place?

Maybe THAT statement will knock some sense into Olympia!

Mmm, I doubt it.

18 posted on 05/30/2003 8:39:05 AM PDT by EGPWS
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To: fight_truth_decay
Snowe is an idiot.

To be fair, I suppose she wants to also give food stamps and welfare payments to those currently paying taxes, because they are not benefitting from these programs.

19 posted on 05/30/2003 8:39:23 AM PDT by 1Old Pro (The Dems are self-destructing before our eyes, How Great is That !)
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To: fight_truth_decay
>>In the tax-cut compromise struck by negotiators in a House-Senate conference committee, the increased credit was made available only to families that earned enough to pay taxes<<

At least the truth that these people do not pay taxes was stated in the article.
20 posted on 05/30/2003 8:42:27 AM PDT by netmilsmom (God Bless our President, those with him & our troops)
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