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WP editiorial says a NEW TAX BREAK FOR WELATHY "is unnecessary, misguided and irresponsible...You'd think they'd be embarrassed, but they're not."
Leave No Rich Child Behind, May 19,2004; A22 WASHINGTON POST
THE HOUSE of Representatives plans to take up a bill this week that would provide new tax breaks to families earning as much as $309,000, while doing next to nothing for those at the low end of the income scale. The bill, which could come up as early as today, is the most egregious part of a House tax-cutting spree that altogether would add more than $500 billion to the deficit over the next 10 years, according to estimates by the Urban Institute-Brookings Institution Tax Policy Center.
The House would not only make permanent the $1,000-per-child tax credit enacted as part of the 2001 tax cut but would dramatically increase the income limits for eligibility. Currently, married families with incomes of up to $110,000 receive the full credit; the bill would more than double the income ceiling, to $250,000. Under existing law, families with two children and incomes up to $149,000 receive a partial tax credit; the bill would make that partial credit available to families with two children and income of between $250,000 and $289,000; families with three children would be entitled to the partial credit up to an income of $309,000.
This is unnecessary, misguided and irresponsible. Families at that income level have already enjoyed significant benefits from the recent tax cuts; they don't need an extra subsidy to help support their children. While tax cut proponents argue that lowering marginal tax rates or cutting dividend and capital gains taxes helps promote economic growth, there is no such claim to be made for the child tax credit. And the increase in the income ceiling would cost $69 billion through 2014, $87 billion if you count increased interest payments on the extra debt.
House Republicans have the gall to propose all this -- and many House Democrats don't seem to have the spine to oppose it -- while providing almost no extra help for the poorest families. Currently, low-income families who earn more than $10,750 are eligible for a small refundable tax credit. (These are families that pay payroll taxes but don't earn enough to be subject to paying income taxes, so they get a check back from the government.) For example, a married family with two children and an income of $12,000 gets $125 per child. The House bill would speed up by one year a planned increase in the size of this credit, giving low-income families a one-time average benefit of $150 per child. This remedies -- belatedly -- last year's mean-spirited omission of these families from the accelerated increase in the child tax credit enjoyed by higher-income taxpayers. The cost of this meager improvement: $1.8 billion.
For families earning less than $10,750, however, the House bill would do nothing... Thus, a family with a parent working full-time at the minimum wage ($10,300) would get no benefit from the bill. A better-off but still low-income family with two children would get a one-time $300 average tax break ($150 per child). By contrast, two-child families with earnings between $150,000 and $250,000 get $22,000 in extra tax breaks over the next 10 years ($1,000 per child per year). This is bad social policy, bad tax policy, and bad fiscal policy.
You'd think they'd be embarrassed, but they're not.
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