June 06, 2003|By Clarence Page
WASHINGTON - Sometimes the system works. Democrats and Republicans alike have been stirred into action by the news that President Bush's latest tax cut left out a healthy chunk of the working poor.
The sudden surge appears to have been sparked by the realization that low-income workers pay taxes, too.
Republicans and the White House appear to have been caught off guard by the news that the tax cut bill Mr. Bush signed does not, as he said in his April 26 weekly radio address, "reduce tax rates for everyone who pays income tax."
That clever phrasing concealed the glaring reality that as many as a third of American households received nothing from the bill Mr. Bush signed last week.
Bush spokesmen explain that when he says "everyone who pays income tax," he is not including families who earn too little to pay income taxes, even if they still pay Social Security and other payroll taxes.
But The New York Times reported May 29 that the tax law stripped out a child tax credit for families who earn from $10,500 to $26,625, even though they, too, are part of "everyone who pays income tax."
Most taxpayers will receive a $400-per-child check in the mail this summer as a rebate under the new law, which raises the child tax credit from $600 to $1,000.
Families who earn less than $10,500 will not receive the refund checks because they earn too little to pay federal income taxes. Proposals to extend the credits to them failed in both houses of Congress on party-line votes.
But taxpayers in the next bracket up, who do pay income taxes, also were left out of the credit because of the bill's formula for calculating.
That leaves out 11.9 million children, or one out of every six children under 17, according to the Center on Budget and Policy Priorities, a liberal-leaning Washington research group whose findings the Times reported.
When it looked as though Republicans might need her vote, Democratic Sen. Blanche Lambert Lincoln of Arkansas persuaded the full Senate to expand the bill's child tax credit to include those low-wage earners. Almost half of the taxpayers in her state had adjusted gross incomes that were less than $20,000, she noted.
But, alas, by the time the tax bill churned its way through last-minute revisions by House and Senate leaders and landed on Mr. Bush's desk, it no longer included Ms. Lincoln's provisions.
Suddenly the big tax-cut debate was re-ignited over the weekend, and by Monday a bipartisan coalition of senators introduced new legislation to boost the child tax credit for the estimated 6.5 million omitted families.
After all, as several voices pointed out, the working people in that bracket include as many as 200,000 military men and women, many of whom recently served courageously in the Iraq war.
Funny what happens when poor folks, rendered all but invisible in the tax-focused politics of recent years, suddenly have real faces again, including military faces.
To paraphrase an old saying, God must have loved low-income tax filers, she made so many of them.
Of course, if Congress and the White House wanted to stimulate the economy with lots of spending, not just rolling over of investments, they would direct money to the poorer folks, since they tend more often to live from paycheck to paycheck. Democrats make this point during those moments when they want to show that they have a pulse.
But the Republicans have put them in an odd predicament. It's hard to complain that a country running a $400 billion deficit can't afford another tax cut while also complaining that, by the way, our constituents aren't getting enough of that cut.
In another study of the Bush tax plan, researchers at the liberal-leaning Urban Institute-Brookings Institution Tax Policy Center found another 5 million tax filers in the lowest tax bracket and 2.5 million single filers without children who also miss out on any benefits.
White House spokesman Ari Fleischer disputed the contention that the lower brackets were missed by this bill, pointing out that they received relief in the 2001 bill that Bush signed.
Nevertheless Mr. Bush's recent speeches about his "Jobs and Growth Plan" seem to be referring to the recent bill, not the earlier one.
I'm reminded here of what a press secretary of Chicago's late Mayor Richard J. Daley once said to some questioning reporters: "Don't listen to what the mayor says, listen to what he means!"
Ah, yes, that same advice often applies to presidents.
Clarence Page is a columnist for the Chicago Tribune, a Tribune Publishing newspaper. His column appears Fridays in The Sun. He can be reached via e-mail at cpage@tribune.com.
