$318 Billion Deal Is Set in Congress for Cutting Taxes

This tax cut goes to everyone.

This tax cut will help the economy.

This tax cut will spur growth and increase tax revenues into the federal government.

Now, anyone got an argument on a point I've made?

A new study by groups critical of the tax law that President Bush signed on Wednesday has found that 8 million mostly low-income taxpayers will not receive any benefit from the law.

Republicans have said for weeks that the new tax law was designed to benefit all those who pay income taxes.

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The new analysis says that the taxpayers who get nothing from the tax law are primarily low-income single people who do not have children and lack income from dividends or capital gains. A large number of low- and moderate-income single parents with children over 16 will also get no benefit from the law, because it did not change the tax rate for such parents who are unmarried.

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The Republican National Committee Web site describes the law in detail and summarizes the point that many members of Congress have also made this week.

"Who benefits under the president's plan?" the Web site asks. "Everyone who pays taxes ?- especially middle-income Americans ?- as tax rate reductions passed by Congress in 2001 are made effective immediately."

Ari Fleischer, the White House press secretary, made a similar point in his news briefing on Thursday, saying that people in the lowest tax bracket would "benefit the most" from the bill. "This certainly does deliver tax relief to the people who pay income taxes," he said, referring particularly to families with children. And Mr. Grassley said last week that "all taxpayers will see more money in their paychecks."

But the new study found five million taxpayers in the lowest tax bracket who get no benefit from the law, and 2.5 million single parents with children who also pay taxes but get nothing.

In the first category are taxpayers in the 10 percent bracket who have no children and no dividend or capital gains income. This group, which constitutes 89 percent of all single taxpayers in the lowest bracket, do not benefit from the expansion of the 10 percent bracket because they are already in it. They have no children, so they do not get the child credit, and they do not benefit from the law's relief for married couples. Members of this group, who make $9,300 to $13,800 a year, now pay up to $600 in income taxes.

In the first category are taxpayers in the 10 percent bracket who have no children and no dividend or capital gains income. This group, which constitutes 89 percent of all single taxpayers in the lowest bracket, do not benefit from the expansion of the 10 percent bracket because they are already in it. They have no children, so they do not get the child credit, and they do not benefit from the law's relief for married couples. Members of this group, who make $9,300 to $13,800 a year, now pay up to $600 in income taxes.

Working poor shafted in a tax cut footnote
By Thomas Oliphant, 6/1/2003
WASHINGTON: THE EVIDENCE of the greedy deed was hidden in plain sight
In a footnote - number 4 on Page 4 of the congressional report spelling out the details of the latest tax cut - it was ''explained'' in typical legislative gibberish:
''The increase in refundability of the taxpayer's earned income, scheduled for calendar year 2005 and thereafter, is not accelerated under the provision.''
In plain English, in the key section of legislation that speeds up tax benefits not scheduled to take effect for a few years, the working poor with children under 17 were being singled out for rejection.
With that one footnote, congressional Republicans and the Bush White House that supervised every detail of their final work, families with roughly 12 million children who work for the minimum wage and a little more got intentionally shafted.
This has happened before. In the first Bush tax cut two years ago, families with another 8 million kids were kept from benefiting from any increase in the children's tax credit. Putting the two actions together, President Bush and his Republican rubber stamps in Congress have managed to sock it to 20 million poor kids - constituting half of all the African-American children in this country and at least 40 percent of the Latinos.

Scrat, I'll believe the economy is on the rebound when 1) the market uptick is based on profits, 2) the unemployment rate is below five percent for more than one year, and 3) the travel industry isn't on the brink of bankruptcy. c.i.

Jim, You have evidently missed the rhetoric expoused by this administration that "everybody will benefit." When they removed the poor from the "child tax credit increase from $600 to $1,000, they changed that to "everybody who pays taxes will benefit." And even that isn't totally true. c.i.

Similarly, should the welfare programs be criticized because they do not benefit the taxpayers?

FYI, single mothers or fathers paying income taxes are exempt from this tax relief. c.i.

FYI, single mothers or fathers paying income taxes are exempt from this tax relief. c.i.