We heard a lot recently about how the Child Tax Credit was denied to poorer families by the cold hearted reps in Congress. Of course, we didn't hear the other side, that many of those poorer families paid little or no income taxes, meaning that the tax credit would, in their case, be a handout. We also didn't hear much about the fact that the initial proposal included just such a handout, but it was dropped by the Senate, in order to meet their arbitrary $350 billion dollar limit, imposed by moderate reps in a doomed attempt to win moderate dem support.
Now the Senate, urged along by the President is attempting to remedy that short sightedness by passing a new bill, authorizing the tax credit for poorer families. Everybody should be happy now, right?
Tom delay and his buddies in the House have decided to play a little power politics with this bill:
Majority Leader Tom DeLay said Tuesday the House will use the Senate's bill, which would send rebate checks of up to $400 per child to 6.5 million low-income families this summer, as a vehicle for language to make tax cuts President Bush signed last month less temporary."If they want the child tax credit, they ought to be able to have it in a package that actually creates jobs and helps the economy grow," said DeLay, R-Texas.
Now don't get me wrong; I'm all in favor of making those cuts permanent, but not now, and not this way. Reps won a victory getting the package passed in the first place. By approving the original bill, the rep Senate insulated itself against charges of indifference to the poor. But now Delay is following in the footsteps of Newt Gingrich and getting greedy. His greed could cause a backlash against reps going into the election cycle. While Bush seems firmly in the lead in the race for the Presidency, the House and Senate are completely up for grabs. Any sign of Gingrichian arrogance could cost reps dearly.
Posted by Rich at June 11, 2003 1:21 PM | TrackBackWell you are correct on part two Rich. Delay is Gingrich two and he shows the true Republican stripe of Greed. I am a bit surprised that you would stoop to call the Child credit a "handout" to low-income families. If it was a rich guy its "Your Money" if it's a poor guy it a "Handout"? What's up with that?
BTW did you check out that Internet Ad link on my blog?
Glad to see you are coming around to our way of thinking on Delay tho. We will make a Democrat out of you yet.
8^)brb
Posted by: Barry Bozeman on June 11, 2003 2:12 PMUhm, because the rich guy actually paid money?
Posted by: SayUncle on June 11, 2003 2:20 PMFor the poor guy it ain't an EIC or a payout.
It is a deduction.
We will make a Democrat out of you yet.
Barry, not in this lifetime. Unlike some, I feel comfortable in calling out reps as well as dems who cross the line.
As for the credit being a handout, the difference is simple. If you get back more than you paid in, it's a handout.
Posted by: rich on June 11, 2003 9:25 PMI was afraid of that Rich.
Who says the poor that are deprived of the extra $400 via the child credit did not pay it in? I thought the only way one got more out was via the EIC.
If the proposed legislation passes, then poorer families will be getting back more than they paid in, just like the EIC. Tax credits are directly applied to your owed taxes. If you owe less than the credit, in some cases, like the EIC, you still get the full credit, resulting in getting back more than you pay in.
Corporations are famous for getting larger refunds than their total tax bill through the use of tax credits.
Practically, I realize these folks need the help. Philosophically, I am opposed to the gov't engineering a transfer of wealth through taxation. There's a middle ground in there somewhere, something along the lines of excessive tax credits being repaid by the recipient at some future date, which goes along with the whole "Hand up, not handout" concept. Unfortunately, we don't have many legislators subtle enough to come up with a plan like that.
On a related topic, I would favor the same type program be applied to big businesses, who often use tax credits to significantly reduce their taxes. The tax credits are created to encourage beneficial corporate behaviors, so we can't penalize companies at the same time we reward them, but maybe a corporate cap on credits wouldn't be a bad idea.
These examples demonstrate the difficulty of addressing social imbalances through the tax code. It's just too clumsy, and the unintended consequences almost always overwhelm the original intent.
Posted by: rich on June 12, 2003 12:06 PM