Tax Credit EXCLUDES Thousands in Maine

MaineToday.Com ^ | Friday, May 30, 2003 | BART JANSEN

[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

[Libloather]

Actually, with the earned income tax credit, many people pay negative taxes.

That's called welfare - no?

[abnegation]

"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!"

You stole my thunder.....why should someone get tax rebates when they didn't pay any taxes. The Dims continue to amaze me with their lies.

[goodnesswins]

"Liberals, however, will argue that even those who pay no income taxes pay sales taxes and therefore have a refund coming."

HUH? Would the Liberals give YOU a refund in YOUR sales taxes YOU paid.....??

[eggman]

Thousands of Maine families with low or moderate incomes won't qualify for the $400 child tax credit that more-affluent families will receive.

The result is that only families earning enough to pay taxes, or about $26,000, will benefit from the change.

So, according to this article, a family with 2 children earning over $26,000 per year is considered "affluent". Doesn't that make just about anyone with a full-time job filthy rich?

[Onelifetogive]

That's called welfare - no?

Silly you...welfare as we know it has ended!

[Retired Chemist]

Most people with kids earning under $30,000 a year qualify for the earned income credit!

[caltrop]

Relax, I agree with you. All I'm saying is that, if you haven't heard a liberal say that yet, at some point you will.

[goodnesswins]

I knew you did....I just wanted to make the point....LOL.

[Cultural Canary]

Many of these folks are probably already getting an Earned Income Tax Credit. The libs are just looking for another way to provide more welfare using the income tax system. Welfare disbursement through the tax system is sooooooo wrong!

[stanz]

Does this cover dependent children (college students) living at home over the age of 17?

[kevkrom]

Complaining about people who don't pay taxes not getting a part of the tax cut... another fine example of the mess caused by social engineering in the tax code.

As far as the comments about the EITC goes, at least it is basically just supposed to be a refund on Social Security and Medicare taxes (that's whay it has to be on "earned income"). The arguments here, though are just dumb... they pay sales taxes? That's a state issue, not a federal one. That is, unless and until we scrap the income tax for a national sales tax -- and those proposals have a built-in refund to offset the costs of necessities that everyone gets, not just those belonging to a certain social or economic group.

[Orangedog]

welfare as we know it has ended!

Yes, it has. Now the lower rungs of the middle class are getting welfare checks. The "UN-earned income tax credit also has a child care tax credit to go along with the welfare check. Better get used to it, because it's not going away. In fact, the damn program expands every year. RINO's will never cast a vote to do away with it, and the rest of the Republicans are too afraid of being called mean names by the Dems.

[Publius6961]

What part of "Tax Credit" doesn't this moron understand?

I bet when he returns a large purchase for a refund, this whiner shares his cash with everyone else at the register!

D'OH!

[cpprfld]

I voted

[Jack Black]

When is Olympia up for reelection? Any challengers likely. I suspect the Club for Growth will be funding them. Useless RINO.

[Orangedog]

My ex-wife has been gaming the system on this for years. She will only work until she gets close to the income for the maximum pay-out for two kids (one is mine, the other is from her 3rd marriage...she's on #4 now...lucky me, I was victim #1). The inflated "child" support she gets for two kids is not only tax free, but doesn't count against her for the working-class welfare check from the IRS.

Late last year, me and victim #3 both received letters from the IRS because she claimed both kids on her taxes for 2001, even though both he and I both managed to get the tax deductions our respective kids for odd numbered tax years. Within a few days of each other, we both sent the IRS copies of the divorce decrees, pointing out that she was not entitled to claim kids that year. That was about 7 months ago and neither one of us has heard anything. I don't know about him, but my tax refund ( and I paid in a hell of a lot more than I got back) was direct deposited into my bank account two weeks after e-filing with no problems. I wonder if they are going to make her pay back the $3000-$4000 worth of tax credit money they paid her?

[TheCPA]

The child tax credit is available only for taxpayers with a dependent child who is age 16 or younger at the end of the tax year (Code Sec. 24(c)(1)).

[Publius6961]

Tax Credit EXCLUDES Thousands in Maine

FLASH!

Dog shows exclude millions of cats!

Oh the horror!
The injustice!

[finnman69]

Rush is nailing Snowe right now for pusihng the $350 billion limit. She voted out the free money to those who pay no taxes.