Snowe introduces bill to restore tax breaks for low-income families

LITTLE ROCK, Ark. – U.S. Sen. Olympia Snowe has introduced legislation she says would restore a quick refund of the child tax credit, which was struck from President Bush’s tax cut package that was passed last month.

Snowe, R-Maine. who introduced the bill Monday with U.S. Sen. Blanche Lincoln, D-Ark., said more than 44,000 families and 73,000 children in Maine would benefit from the restored tax credit.

“This will ensure that the hard-working mothers and fathers of America who earn less than $26,000 per year will now be able to benefit,” Snowe said.

Fellow Maine Republican Sen. Susan Collins, who co-sponsored the bill, said the measure makes good sense and that “extending this tax credit to these hardworking families would help stimulate the economy.”

The senators’ plan would restore the child tax credit for families with incomes between $10,500 and $26,625, adding about 12 million children nationally. They estimate it would cost $3.5 billion.

Lincoln said that half of Arkansans make less than $20,000 a year and are hardest hit by Bush’s tax cut.

“The low- and middle-income working families who were cut out of this tax bill at the last minute are the same people who need the most help in this sluggish economy,” Lincoln said. “These people pay a lot of money in taxes, and this tax cut should put money into their pockets, too.”

Both Snowe and Lincoln are on the Finance Committee and voted against the 10-year, $330 billion tax-cut plan that Bush signed into law May 28. Collins voted in favor of the tax-cut package.

Democratic Rep. Michael Michaud of Maine also introduced a measure in the House Tuesday that would extend the child tax credit while addressing other concerns.

“In a tax bill that supposedly costs $350 billion … and that gives $90 billion of its tax cuts exclusively to millionaires, they decided that they couldn’t spend just 1 percent of that on aid to children in working families,” Michaud said. “This is just plain wrong.”

The Bush tax cut also accelerates the increase in the standard deduction and expands the 15 percent rate bracket to provide marriage penalty relief. However, these provisions exclude many low-income workers, and a couple with two children where each parent earns about $10,000 has a $1,000 marriage penalty. Michaud’s legislation would accelerate the marriage penalty relief in the earned income tax credit to help these workers.