WASHINGTON, May 25 /PRNewswire/ -- House and Senate tax bill negotiators
are considering dropping the Senate's refundable child tax credit from the tax
cut bill in order to pay for further reductions in the top income tax rate.
The House tax cut bill reduced the top rate from 39.6 percent to 33 percent;
the Senate reduces it to 36 percent. Here are the potential winners and losers
in such a contest:
The Losers: Children:
At least 13 million children either get a credit from the Senate but none
from the House or get a larger credit from the Senate bill. The Senate's child
tax credit reaches working families with incomes in the $10,000 - $20,000
range who are left behind by the House child tax credit.
The Winners: The Wealthiest Americans
There were about 480,000 taxpayers with adjusted gross income of $500,000
or more in 1998, including 172,000 taxpayers above $1 million. In 2000, the
average adjusted gross income for taxpayers paying the 39.6 percent top rate
The Senate Child Tax Credit is one of the only elements in the tax bill
that offers any help to low- and moderate-income families. It provides a
refundable credit to families with children of 15 percent of earnings
exceeding $10,000. Even with the Senate Child Tax Credit, only 6.7 percent of
the total tax cut (as passed by the Senate Finance Committee) would be
received by the lowest 40 percent of taxpayers (with incomes up to $27,000 a
year). The top 1 percent, with an average income of more than $1.1 million,
receive 35 percent of the Senate's plan's tax cuts.
Can the tax cut bill conferees really be considering taking away from the
lowest-earning taxpayers with children in order to give more to the top 1
percent, who are already receiving more than $470 billion out of the $1.35
trillion tax cut?
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SOURCE Children's Defense Fund