Child Tax Credit Plan Leaves Out Nearly Half of All Black and Latino Children
The Children’s Defense Fund today released an analysis showing that millions of parents working hard to support their children on low wages will not get any help from speeding up the child tax credit proposed by the Bush Administration. The President’s plan to accelerate the child tax credit provides no benefit to more than one in four American children including nearly half of all Black and Latino children because their parents earn so little they are not eligible for a tax credit.
Children’s Defense Fund President Marian Wright Edelman said this is one more example of how the Administration’s tax proposal favors the rich and hurts children.
“Speeding up the child tax credit doesn’t provide a dime to millions of hard working families,” Edelman said. “The plan leaves no millionaires behind, but leaves millions of children behind. It is irresponsible to borrow money we don’t have to spend where it isn’t needed while freezing services for children.”
Today’s computer analysis shows that millions of children left out of the Admin-istration’s proposal live in working families that earn such low- or moderate-incomes that they pay little or no federal income taxes and therefore, would not benefit from the tax credit. Most economists agree that providing additional income to low-income families provides the greatest economic stimulus because they are most likely to spend it out of need, while those in upper income brackets are more able to hold on to additional income by saving it. Yet the proposed Bush child tax credit provides no additional income to families that need it the most.
The Children’s Defense Fund last week noted that for the cost of eliminating the dividend tax, the government could provide comprehensive health care for all 9.2 million uninsured American children and Head Start for all unserved eligible preschoolers in need. Taxpayers with average incomes of about $1 million would take 42 percent of the value of the proposed dividend tax cut according to the Urban Institute/Brookings Institution Tax Policy Center. Millionaires would receive an average of $27,100 over 10 years from eliminating the stock dividend tax. Taxpayers with incomes of $30,000 - $40,000 would receive only $42.