COL Child tax refund misdirected
Lower-income families excluded from $350 billion tax cut
If President Bush's new $350 billion tax cut is truly intended to stimulate the economy -- a dubious proposal according to most leading economists -- it completely misses the target with one key group of potential spenders.
Families with incomes from $10,500 to $26,625 are excluded from the $400-per-child refund check that most other Americans will receive this year. The wealthiest taxpayers are also excluded from the child credit, but they have many other tax breaks extended to them in the bill.
It is the working poor -- those excluded from the child credit -- whose spending is most restricted by the sluggish economy. They are the people who could most be expected to take that $400 and go spend it. The president's theory, after all, is that spending will stimulate the economy.
These working families excluded from the refund include 11.9 million children under the age of 17. Including them in the child care tax credit portion of the bill would have cost $3.5 billion -- a paltry sum compared with the $148 billion in capital gains and dividend cuts extended to wealthier Americans.
Excluding lower-income working Americans from the benefits of the tax cut blows the cover on the president's claim to be a compassionate conservative. It turns out his compassion is saved primarily for the wealthy.
But, the president's backers say, it was the Senate that refused to budge beyond the $350 billion-size of the tax cut. That might be so, but we doubt anyone in the White House was campaigning as hard for a tax cut for lower-income Americans as the president was campaigning for a dividend tax cut for the upper class. It would have been simple to trim the benefits for the upper class and instead extend a helping hand to the working poor.
This is now the president's tax cut, and this is now his economy. The huge tax cut Bush pushed through earlier in his term has so far failed to create jobs. If this latest tax cut produces the same dismal record, it will be further evidence that the president keeps directing the benefits of his tax-cutting largesse to the wrong people.