----- Original Message ----- From: "Nathan Newman" <nathan at newman.org> To: <lbo-Talk at lists.panix.com>; <pen-l at Galaxy.Csuchico.Edu> Sent: Friday, March 30, 2001 6:20 AM Subject: Marriage Penalty- Child Tax Credit Bill Passes- Where's Max to Analyze?
> Well,
>
> The House passed the Marriage Penalty-Child Tax Credit portion of Bush's
tax
> plan. However, they made one major modification which was to allow
parents
> who pay no income taxes to qualify for the child tax credit up to the
point
> they pay social security taxes. It also applied some of the marriage
> penalty rhetoric to decreasing the burden on poor families who marry and
> lose EITC benefits I don't know how this interacts with the overall EITC
and
> whether it resembles at all some of the proposals Max has made for merging
> the EITC into the child tax credit, but it is a significant improvement
over
> Bush's proposals.
>
> It's actually the one part of the tax plan that, while not ideal, has some
> positive aspects. It will take a large number of families off the tax
roles
> completely, thereby further weakening future support for "tax cut"
politics.
> As a number of conservatives have noted, we are reaching the point where a
> majority of families will be paying no income taxes at all. This is
> actually quite positive, since any appeals to cut all taxes "X percent"
will
> have no even propaganda appeal to such families, since X% of zero is still
> zero.
>
> Strategically, there is a good case to let this part of the tax plan pass
as
> the most favorable to promoting progressive politics in the future. It is
> actually better in some ways than the $300 rebate plan, which might help
> poorer families more in the short-term, but would not shift the political
> terrain against future tax cut politics quite as much.
>
> -- Nathan Newman
>
> March 30, 2001
> House Passes 2 More Pieces of Bush's Tax Cut
> By DAVID E. ROSENBAUM
> ASHINGTON, March 29 - Forging ahead despite uncertain prospects in the
> Senate, the House of Representatives today approved two more elements of
> President Bush's tax-cut plan and took the first tentative step toward
> eventual repeal of the estate tax.
>
> By a vote of 282 to 144, the House passed a bill that would lower income
> taxes for married couples and double the tax credit available to families
> with children. The measure is somewhat more favorable than the Mr. Bush's
> proposal to low-income families and less beneficial to the wealthy.
>
> The bill, which would give all couples who pay income taxes a break, has
> these four parts:
>
> . It would raise the standard deduction, starting next year, to make it
> twice that for single people. This year, the standard deduction for
couples
> is $7,600 and that for single people is $4,500.
>
> . For couples who itemize deductions, the bill would gradually raise the
> amount of income covered by the 15 percent tax bracket so that it is twice
> that for single people.
>
> . For low-income working couples, the bill would raise the amount of
income
> on which they would be entitled to the earned-income tax credit.
>
> . It would adjust the alternative minimum tax, a special tax on those with
> unusually large deductions, to ensure that married couples would not be
> treated less favorably than individuals.
>
> The House's plan would be more generous than Mr. Bush's proposal for
> low-income couples and those couples with only one wage earner.
>
> The other part of the bill the House approved would double the tax credit
> for families with children to $1,000 a child, from $500; it would also
make
> $100 of that increase retroactive and applicable to 2001 income taxes.
>
> Workers with one or two children who do not owe enough in income taxes to
be
> entitled to the full credit would be allowed a rebate up to the amount
they
> paid in Social Security and Medicare taxes. Currently, only taxpayers with
> three or more children are entitled to that refund.
>
> Families with incomes up to $130,000 are now entitled to the child tax
> credit, and the bill retains that income limit. Mr. Bush proposed raising
it
> to $200,000 a family and did not suggest expanding the refund.
>
>
>
>