Marriage Penalty- Child Tax Credit Bill Passes- Where's Max to Analyze?

[Nathan Newman]

Lieberman is pushing pretty much the same proposal as the Progressive
Caucus, yes, although only for one year, where the Progressive Caucus plan
would extend for ten years and replace Bush's plan in toto.  There is an
alternative plan by Daschle and Gephart to send $300 to all income taxpayers
(unlike Lieberman who would extend it to those paying payroll taxes as well)
while adding a permanent drop in the 15% tax rate to 10% on the first $6000
of income ($12000 for couples), adding another $150/$300 of rebate for the
second half of the year and a permanent $300/$600 tax cut for income
taxpayers.

As I said, in some ways the program just passed by the House may be as good
as the Dem plan for families, although it doesn't help single folks.

-- Nathan

----- Original Message -----
From: "Chris Kromm" <ckromm at mindspring.com>

I need some clarification -- is the $300 rebate plan Joe "God Squad"
Leiberman was pushing the other day similar to the one promoted by the
Progressive Caucus?
Chris

----- 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.
>
>
>
>