LOW-INCOME FAMILIES STILL BEING HELD HOSTAGE - July 14, 2003 Vol. 4 No. 14

July 14, 2003 Vol. 4 No. 14:

Published: 07/14/2003

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LOW-INCOME FAMILIES STILL BEING HELD HOSTAGE

Extension of the child tax credit remains stalled with the House determined to add more deficit-deepening tax cuts.

Around the end of July, about 25 million middle-income taxpayers will begin receiving a child tax credit check as part of the $350 billion tax bill signed by President Bush in May. The 6.5 million plus low-income filers who were left out of the deal during tax bill negotiations cannot expect checks anytime soon, even though both the House and Senate passed bills to extend the credit. The Senate bill offsets its $10 billion cost so the total $350 billion cost of the tax bill will not be exceeded. However, the House bill adds other provisions that would benefit families making over $110,000 and will cost $82 billion over the next ten years, none of which is offset.

Most recently, House members have been hoping to add even more tax cuts. Some House leaders are promoting adding a provision to make either state sales taxes (in the seven states with a state sales tax and no state income tax: Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming) or state income taxes, whichever is larger, deductible from federal tax payments. That provision would cost another $27 billion over the next ten years. Negotiations appear stalled on the child tax credit for low-income families, in spite of parliamentary efforts by Senate Democrats to force action. House Republicans insist on a larger bill with additional tax breaks.

Fair Taxes for All coalition members have planned a series of events to publicize this issue and place pressure on Congress to pass the Senate version of the child tax credit bill before the July 25 recess.