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.

[CanisMajor2002]

What's the DEAL? What did the Republicans get besides a little vaseline?

[ImpotentRage]

Yep. They folded again. The Republicans couldn't fight their way out of a paper bag.

[okkev68]

They didn't pay any taxes! Am I missing something? This is supposed to be a refund/reduction/etc... If they want to do a handout then do it through welfare benefits.

[ClearCase_guy]

Love those headline writers. As soon as I saw the headline "Senators Strike Children", I knew that we were dealing with evil Republicans. I just thought it might be a crime story.

[Recovering_Democrat]

P*****s. I hope GW vetos this piece of crap. People who don't pay taxes shouldn't get a tax benefit.

[TexasGunLover]

Why should people who don't pay income tax get a refund? That makes no sense at all and is pure socialism...

[jimt]

Yep. They folded again. The Republicans couldn't fight their way out of a paper bag.

Worth repeating.

Tax refunds for people who don't pay taxes. How conservative !

[MJY1288]

I'm losing faith in Frist, Hopefully the House ignores this givaway

[Hacksaw]

Yep. They folded again. The Republicans couldn't fight their way out of a paper bag.

Yep. They gave away a welfare benifit that they could easily have defeated.

[Moonman62]

What's the DEAL?

It's the "new tone in Washington."

[Uncle George]

The GOP got a BUNCH of help in bolstering the economy because those lower income workers SPENDDDDDD that $400 per child immediately goosing the ecomomy RIGHT NOW.

[ancient_geezer]

The bill's $10 billion cost will be offset by an extension of customs fees.

Once again smoke and mirrors strike. They give with one hand while taking with another.

Custom fees are embedded in the price of goods received as imports. Tariffs and excises, for the most part, increase the prices of goods. Guess who buys the most imported (e.g. discount) goods?

http://www.cbpp.org/taxday98.htm

CBO Estimates of Effective Federal Tax Rates for 1998
Families Ranked by Income Quintile	Individual Income Tax	Social Insurance Taxes	Corporate Income Tax	Excise & Tariff Tax	Total Federal Taxes
Lowest	-6.9%	7.8%	0.5%	2.8%	4.2%
Second	1.7%	9.9%	0.9%	1.6%	14.2%
Third	6.3%	10.8%	1.4%	1.2%	19.7%
Fourth	9.0%	11.3%	1.4%	1.0%	22.7%
Highest	16.2%	8.0%	4.6%	0.5%	29.3%
Top 10%	18.0%	6.7%	5.8%	0.4%	30.8%
Top 5%	19.7%	5.3%	7.0%	0.3%	32.3%
Top 1%	23.0%	3.0%	9.5%	0.2%	35.7%
Average for all families	11.2%	9.3%	3.0%	0.9%	24.4%
Source: Congressional Budget Office, May 15, 1997. Notes:  Pre-tax family income is the sum of wages, salaries, self-employment income, rents, taxable and non-taxable interest, dividends, realized capital gains, and all cash transfer payments. Income also includes the employer share of Social Security and federal unemployment insurance payroll taxes, and the corporate income tax. For purposes of ranking by adjusted family income (AFI), income for each family is divided by the poverty threshold for a family of that size. Quintiles contain equal numbers of people. Families with zero or negative income are excluded from the lowest income category but included in the total. Individual income taxes are distributed directly to families paying those taxes. Payroll taxes are distributed to families paying those taxes directly or indirectly through their employers. Federal excise taxes are distributed to families according to their consumption of the taxed good or service. Corporate income taxes are distributed to families according to their share of capital income.

[adam_az]

Not the new tone, the new Hue... RED.

[RightWhale]

"This administration is waging war on poor children," said Sen. Hillary Rodham Clinton, D-N.Y.

Yeah, like that's a real appropriate remark. Go on back to your Twin Oaks commune and wait for our call.

[Moonman62]

I hope GW vetos this piece of crap.

He'll veto it just like he's vetoed all the other pieces of crap, LOL!

[eboyer]

"Why should people who don't pay income tax get a refund? That makes no sense at all and is pure socialism... "

I agree. Of course lowering taxes because of dependants is also socialism.

[Ford Fairlane]

This is bull

And what really pisses me off, the only "minimum wage" workers I know are waitresses, who usually only report 10% of their tips

At the watering holes I go to, they get around $150/night in tips

Figure they work 5 shifts per week, 50 weeks per year (2 weeks vacation) that comes to $37,500/yr just in tips!

[KansasGirl]

What the chances this welfare giveaway will pass the House? No doubt W will sign it.

[kattracks]

Republicans in the Senate struck an agreement to expand the benefit for low-income families and extend the benefit to more high-income couples.

It was my understanding that the Republicans wanted this in the original bill.

[Sloth]

I have a groundbreaking idea for the GOP. We should not only support this $1K per child tax credit for everybody, we should quadruple it (the Dems would have a collective heart attack). THEN we start calling it a "school voucher" and declare victory. Drastically scale back public school funding, and statutorily require public schools to charge parents directly on a 'fee-for-service' basis, and require the tax credit money to be used for education at the school of the parents' choice.

[The Old Hoosier]

This isn't a deal. If they're going to use the tax bill to give welfare, they're going to have to make it permanent first.

[Satadru]

How much will you bet that Bush will cave? Why is it that there is no leadership from the White House on this issue? Why can't our President make the case forcefully that people who don't pay taxes shouldn't get a tax cut? If the White House does not take the initiative, they will get villified in the popular press.

[hsmomx3]

According to the IRS website http://www.irs.gov/newsroom/article/0,,id=109812,00.html

some people making under this 26k will receive money this summer. Here is an example from the website:

Ms. Gray has one child, age 7; her 2002 earned income was $16,560; she claimed a Child Tax Credit of $368 and an Additional Child Tax Credit of $232. Ms. Gray will receive an advance payment of $389.

[StriperSniper]

If they want to do a handout then do it through welfare benefits.

Over in the House, when Jack Kingston(R-GA) was making a similar case, Harrold Ford Jr. had a meltdown! For about a minute he was shouting above Kingston and the gavel. This was at about 2:50 D.C. time, expect to see it on Brit tonight if he has the nerve.

[NC Conservative]

refundable tax credits

READ: Income Redistribution

[CanisMajor2002]

Republicans in the Senate struck an agreement to expand the benefit for low-income families and extend the benefit to more high-income couples.

It was my understanding that the Republicans wanted this in the original bill.

I suppose it depends on your definition of "high". I'd start at families earning under $1 billion. :)

[daler]

Your sarcasm is duly noted.

He won't veto it for the same reason the Senate "fixed" the tax bill...so as not to offend anyone.

I pay taxes, they don't. They'll get a check, I won't.

I guess the fact that I'M OFFENDED doesn't matter much to anyone.

What offends me even further is I have three kids, the youngest 17, the older two in college. What?! They're not costing me anything, you say?

[SierraWasp]

"It's the "new tone in Washington."

How can that be when both parties are tone deaf to the 60% of Americans that actually pay ANY federal income tax at all!!!

Actually, it "compassionate conservatism" as opposed to "Considerate Conservatism!" A Considerate Conservative considers this kind of bizzare injustice as pure unadulterated "Bull Chit!" (a little Mexican NAFTA lingo for ya)

[kattracks]

I suppose it depends on your definition of "high". I'd start at families earning under $1 billion. :)

That's the Dim's definition.

[Blood of Tyrants]

What the hell? Hasn't it already passed? Why are the spineless Pubs crumbling now?

[Ga Rob]

"They didn't pay any taxes! Am I missing something? " You have apparantly missed the last 40 years of the Great Society?? I think they should give the people a check for the welfare aka tax cut aka EITC, whatever you want to call it...they have to pick the check up and when they do, they are checked by the cops for back warrants, back taxes(if they ever should have paid any), traffic tickets(because they all have cars and no jobs), library fees (what am I thinking),etc, etc, etc. Then they should arrest them for the things they find. They should make this known....90% of the good for nothins will not show up and they can split the cash evenly amongst us real tax payers!!!!

[Orangedog]

Maybe if we started calling congressional republicans mean names and tell them that they are cruel and heartless we can get them to vote the way consevatives are supposed to. Just a idea...it works for the marxists on the other side of the isle in congress.

[Ga Rob]

Sooooo $400 gooses the economy??? Doing what??? It's not a blip on the radar screen...IMO.

[newgeezer]

As much as I like the idea of vouchers, there is one major show-stopper for your idea: Public education is not a Federal issue. It's local.

One of your points is bulletproof. They should indeed "drastically scale back public school funding" -- all the way to zero.

[Publius6961]

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.

That's fraud.

If any company in the U.S. tried that they would face class action lawsuits and jail time.

What makes legislators exempt?

Have they legislated a new definition for "rebate" which is 180 degrees from its original meaning?
Can they do that?

[Blood of Tyrants]

A NEGATIVE income tax?

[CanisMajor2002]

That's the Dim's definition.

Let me clarify:
Raise the ceiling so that every family who earns under $1 billion a year gets the tax cut. :)

[Centurion2000]

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.

WTF is this guy talking about ... Democrats are getting almost EVERYTHING they want in this administration.

[Publius6961]

I am so furious I see red.

Not because they voted to give more of my money to the permanent social parasites, but for hiding it under the label "rebate".

[Consort]

Why should people who don't pay income tax get a refund? That makes no sense at all and is pure socialism...

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.

[Sloth]

True... but 90% of what's done federally shouldn't be. Since both parties are raping the Constitution, I'd at least like my party to rape it in a way that produces a more desireable outcome.

[Orangedog]

No, he'll sign it. [sarcasm]It's important to "take this issue away" from the dems [/sarcasm]. If the republican keep taking these issues away from the dems, we're not going to have much of a platform other than "we're not as bad as the other party."

[NC28203]

An intersting thing to note about your table is that those receiving the tax credit do in fact pay taxes. They may not be paying income taxes, but they are paying federal taxes. This counters, in part, the argument that we shouldn't give the benefits of the credit to those that pay no income tax.

[Publius6961]

I am going to ask my senator to introduce a new bill, called The Definition of Act Act.

[CanisMajor2002]

Not because they voted to give more of my money to the permanent social parasites, but for hiding it under the label "rebate".

Now here's an idea for raising money! Fine public officials $1,000 for every misuse of the English language! :)

[Dave S]

I agree. Of course lowering taxes because of dependants is also socialism.

Damn right. If people want to bring children into this world they ought to pay for them, themselves and that includes education spending. Enough of this social engineering.

[rwfromkansas]

Well, I am not jumping up and down about this one.

We got part of what we wanted, but not all of it.

I do not like the idea of giving a rebate to someone that does not deserve it!!!! Maybe it will help the economy somehow though. Since the folks who will be getting it will immediately spend it instead of save it (these folks don't know the word "save"), it may help at least for a bit....maybe. But the impact may be so small as to not even be noticeable.

[netmilsmom]

Oh Geez OH MAN!!!!!
The school voucher idea is the best!

Let's do it!!!!

[GraniteStateConservative]

"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.

Sen. Lincoln is working hard in Washington to bring needed tax relief to Arkansas families-- and she's getting results. Re-elect Sen. Lincoln-- strong leadership for Arkansans.

Yeah, Arkansas didn't need any GOP senators anyway. Rev. Mike can join the Bush Administration in 2005, I guess.