Senators Strike Child Tax Benefits Deal

AP | 6/05/03 | MARY DALRYMPLE

[kattracks]

WASHINGTON (AP) — Unable to shake Democratic demands that minimum wage workers get the same benefit from a $1,000 child tax credit as other families, Republicans in the Senate struck an agreement to expand the benefit for low-income families and extend the benefit to more high-income couples.

"There is a deal," said a spokesman for Sen. Blanche Lincoln, D-Ark., who has been advocating the change since President Bush signed a $350 billion tax cut last month.

The strategy, designed to diffuse a growing storm over a bigger child tax credit for middle-income but not low-income families, gives both Republicans and Democrats a reason to back the bill.

Minimum wage workers would get the same rebate check, worth $400 per child, going to other families later this summer — giving Democrats a rare victory in a Republican-ruled government.

Married couples making up to $140,000 could claim the full credit for two years at the end of the bill's 10-year horizon. That change would limit the so-called "marriage penalty" in the credit and give Republicans a win.

Republicans resisted changing the law, which currently offers the credit to families who pay income tax and gives minimum wage workers — those who get enough tax benefits to see their income taxes eliminated — a partial refund.

Some Republicans have historically supported refundable tax credits, such as the much larger earned income tax credit, as a way to encourage low-wage workers to stay in the labor force and avoid welfare.

Backed by a strong push from community activists, Democrats pointed to the tax cut enacted last month as concrete proof that Republicans favor the wealthy over the poor.

"This administration is waging war on poor children," said Sen. Hillary Rodham Clinton, D-N.Y. "The reality is that they are steadily and surely trying to turn the clock back on all of the programs and supports that working families and their children need and deserve."

The legislation also reduces the five definitions of a "child" used for different tax deductions and credits to a single definition. The bill's $10 billion cost will be offset by an extension of customs fees.

[RAT Patrol]

I certainly understand what you are saying. BTW, you will be shocked at what your 18 month old can learn already. Do me a favor. Just start with the letter "O" and point it out just like you do a bird or a dog or whatever. When he's got that one down, go on to a "T" or something totally different. Make a game out of finding the letters in the newspaper (headline print size). Everyone will think your kid is a genius and it's really easy to have them recognizing the whole alphabet even this early. If he's not talking (mine wasn't much) just point. They love it.

Then go on to letter sounds. Then buy a good phonics reading program and voila! He's well on his way to a great education pre-K.

[mdwakeup]

Right now income tax is calculated after fica is subtracted. Hasn't that always been the case?

That's never been the case. You may have some wages that are not subject to income tax withholding, 401(k) contributions for example, but the general rule is that the payroll tax applies to all earnings up to the annual limit. FICA is a perfect example of double taxation.

[ImphClinton]

It is not the people opn welfare that will get this credit.

You have to actually work and earn 10,400 or more to qualify.

Seems that making the tax refundable will encourage more people to take minimum wage jobs and thus not collect far more in welfare. Furthermore these cheep workers power Wall-Mart and many other employeers who are too cheep to pay their employees a decent wage.

[newgeezer]

Now a bunch of people who didn't pay the tax in the first place get to take a vacation ... At least you could say, thank you.

Let's get one thing clear. I'll be getting a rebate of my taxes. They're still keeping a boatload of what I paid in income taxes. If you're looking to rail on people who're profiting from income redistribution -- the people who receive more than the income tax they paid in -- you're barking up the wrong tree.

I choose to thank the people whose kids I hope will be enough to keep Social Security afloat for another 25 years so that I can start to see a return on my compulsory "investment."

[eboyer]

I didn't believe you so I talked to our payroll department.

You are correct except that it is really quadruple taxed.

I pay fica. Then I pay fed income tax including what was taking for fica. Then I pay state tax including what was taken for fica. Then if I ever see benefits it is taxed.

Aaarg!!!!

[Consort]

Get something straight before you head back to France. First go back and reread all of my posts and try not to move your lips while you're doing it.

Nowhere did I say that people who don't pay taxes should get tax money back. I said that people who pay sales taxes or payroll taxes or fees should get some of that tax they paid back just like people who paid income taxes are getting back some of their tax money. Got it yet?

Now, just where did you come up with "non-taxpayer" and "poor non-payers"? Not in my posts.

[nygoose]

The Senate rammed it through while President Bush was out of the country.

[The South Texan]

And what makes you think that low income wage earners dont pay taxes? Ever hear of FICA, sales taxes, and those only include the visible taxes. They also pay corporate income taxes and excise taxes, and tarriffs. Low income people generally pay a higher percentage of their income in taxes than middle income tax payers when you include their entire tax load.

And "rich" people don't pay more in excise(tarrifs) and corporate taxes when they by more expensive things? The excise tax on a Sony TV will much higher due to it's cost than let's say a Sanyo. I don't see to many poor people driving BMWs , so I would say the "rich" pay more in excise taxes than the poor will ever pay in their lifetimes.

[Pukin Dog]

Rammed it through WHAT?

Has everyone here forgotten how this process works? Just because the Senate agreed on this, does not make it law. This is nothing but a dodge. They know Delay will kill this when it gets to the house. No harm done, except to a few egos. Bush being gone; its the best time to take care of this, so he is not asked for an opinion.

Tom Delay will clean up the mess, and you folks are worrying about nothing.

[Numbers Guy]

"This administration is waging war on poor children,"

Bush plan: No tax credit for people paying no taxes.

Democratic plan: No tax cut for people paying no taxes.

If Bush is waging a "war" on poor people, then the Dems are on the front lines of the war.

[The South Texan]

"Nowhere did I say that people who don't pay taxes should get tax money back. I said that people who pay sales taxes or payroll taxes or fees should get some of that tax they paid back just like people who paid income taxes are getting back some of their tax money. Got it yet?"

So someone that make $141,000 should not get anything back, whereas most of the "poor" that get a few thousand dollars back every April 15 due to earned income tax credit should get additional $400+. If you listen to the Rats, the poor can't afford to by anything anyway and at least in this state food and medicine are exempt from sales tax which is where alot of their money goes. And we do pay the same flat rate on other goods which a "rich" person will by more anyway, so he pays more in taxes in that case.

[mdwakeup]

And if you live in a jurisdiction with a municipal income tax, add another layer!

[DugwayDuke]

Quite frankly, giving a child tax credit to people who don't pay taxes makes as much sense as giving a child tax credit to people who don't have children.

[DugwayDuke]

Quite frankly, giving a child tax credit to people who don't pay taxes makes as much sense as giving a child tax credit to people who don't have children.

[savedbygrace]

He'll sign it.

[Sparta]

The Republican Party has just endorsed welfare today. Shameful. And why should I vote for these people again?

[Pukin Dog]

There will be nothing to sign. Tom Delay just said on CSPAN, that he wont even bring it to a vote. It is dead, done, over, fini', finished.

[savedbygrace]

It's ALL smoke and mirrors, geez.

Unless the annual budget decreases in real numbers, this means little to nothing. The people who get tax "cuts" will end up paying more in fees and/or purchases. If business and corporate taxes go up, they pass on the higher taxes to the consumer. If the government gives some a "tax cut" they raise taxes on others and raise fees in other places.

But I'm not telling you anything you don't already know. I'm just venting.

[TexasGunLover]

They pay sales taxes and other non-income taxes and fees and payroll taxes if they work. So, the money they get back is from those taxes they payed. Everybody is getting back money that was payed in the form of one tax or another. I could be wrong.

The point is, anything other than a flat tax is ridiculously unfair. It's absurd to expect the rich to pay more than the poor. If Bill Gates is going to get taxed at 49% on his income then that single mother making $20,000 a year should get taxed at the exact same rate.

[johnb838]

How come single people get NO tax breaks whatsoever ?

Hear, hear!