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.

[BabsC]

No, because it's being billed as an "income tax refund".

[Consort]

The answer is yes, no matter what it's called or what its billed as — unless you think that the government should not let us keep more of our money.

[HungarianGypsy]

The sad thing about this thread is that so many on hear write as though they believe that anyone considered wirking poor is just going to waste money or is already on welfare.

Last year my family went from a middle class income of about $1000/week to my husband being unemployed for four months. (because of a back injury) We still had to pay taxes from the year before. This year the refund we got was applied to our 2001 taxes.

So for last year (as far as income) my family would fall into this working poor class. Now, I am not expecting a rebate, just like we didn't get one for 2001. But if we do, should we use it to catch up on our needs or just send it back, so all of you will be happy and not look down on us?

[HungarianGypsy]

Of course, I try to make a point and type the wrong "hear". Here.. HEre ... HERE I was supposed to say. :-P

[DuncanWaring]

The government stealing by the point of a gun from actual tax payers to give it away free to those who are unable to earn...

Unable, or UNWILLING!

[Satadru]

Except it is not a tax-cut because these people are not paying taxes in the first place. It is a spending and welfare program.