November 25, 2024
Editorial

Taxing Fix

The current stalemate in Washington over how to restore the child tax credit that was wrongly withheld from millions of low-income families could be written off as partisan bickering if the maneuvering did not affect real people, including 44,000 families in Maine.

Rather than pass a sensible Senate version of a bill that would give the credit to families that earn between $10,500 and $26,625 a year, House Republicans persist in trying to pile more gimmicks onto the measure. Sen. Olympia Snowe has wisely said enough is enough and has urged a conference committee, that so far has failed to reach a compromise, to pass stand-alone legislation to fix the problem.

The fact that 6.5 million families would not get checks for the $400-a-child increase that was part of the president’s $350 billion tax cut and stimulus plan was brought to light soon after the bill was passed in May. Beginning this month, the Treasury Department is mailing out checks to 25 million middle-income taxpayers to compensate for a retroactive increase in the tax credit from $600 to $1,000 per child. Sen. Snowe is rightly concerned that low-income families will have to wait, perhaps a long time if House Republicans hold sway, to get their checks.

The House’s Republican leadership is now proposing that the tax credit be included in the welfare reauthorization bill that will be taken up this month. There are many problems with this approach. For one, including low-income families in the tax break is not welfare, it is fair. For another, it could take up to a year for new welfare legislation to be crafted. That’s a long time for families – who could spend the money to stimulate the economy, according to the president’s justification for the tax cuts – to wait. Finally, Republicans at a later date could turn around and argue that the tax credit has nothing to do with welfare and not move that part of the bill forward.

Not only does the House measure extend the benefit to those making more than $110,000 annually and cost more than $80 billion, some Republican representatives are now seeking to add a provision to the bill to make state sales taxes deductible from federal income taxes in the seven states where there is no state income tax. This will add another $27 billion to the cost of the bill. The Senate bill, sponsored by Sens. Snowe and Blanche Lincoln, an Arkansas Democrat, was passed by a vote of 94-2 and pays for itself by raising customs fees.

None of this is helpful to the families that didn’t benefit from the massive tax cut bill’s largess, including up to 200,000 military families with incomes too low to qualify for the credit. Ensuring that the House quickly follows the Senate’s bill, with a little more prompting from the White House if necessary, is the best way to get these families the money they deserve.


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