Comforting the comfortable
Comfort the comfortable and penalize the poor. Like the idea? If so, you’ll really like legislation scheduled for consideration today in the U.S. House of Representatives.
The House is scheduled to take up legislation that would gut improvements for low-income Americans in the Child Tax Credit (CTC), improvements passed originally in 2009, renewed in 2010 and 2012, the latter as part of the “fiscal cliff” package, where it was used as a bargaining chip to pass very expensive exemptions in the estate tax — a benefit only to America’s super-rich.
To put this in context, the House leadership bringing this new legislation to a vote will not even consider an increase in the minimum wage, now stagnant over five years nationally (6 1/2 in Iowa). The CTC, it must be noted, is one of the nation’s most effective anti-poverty tools, offsetting part of the cost of raising a child. So, as families earning at or below the minimum wage continue to lose ground, the CTC proposal will set them back even further. As noted by the Center on Budget and Policy Priorities (CBPP):
A loss at lower incomes — yet a boost at higher incomes. According to Citizens for Tax Justice, the Iowa impact of the new legislation would be:
- a $285 loss on average to families with incomes below $40,000, and
- a $696 benefit (tax cut) to families with income above $100,000.
Here’s how it works, according to a summary by CTJ:
Adding insult to injury for low-income folks is that the improvements targeted for repeal came in the aforementioned “fiscal cliff” package, which made permanent big estate tax breaks for the rich, while extending improvements in the Child Tax Credit and Earned Income Tax Credit for only five years. CBPP’s Robert Greenstein at the time called that a “bitter pill.”
That was before these new proposals not only to cut back the CTC for lower-income families — but to expand access at higher incomes — and to adjust the high end for inflation, something lawmakers have refused to do for the minimum wage.
A bitter pill? At least. For some, all of this might seem to be an overdose.