Last week the House voted to permanently extend the $1000-per-child tax credit. This measure approved last week would make permanent the $1,000-per-child credit that President Bush secured in 2001. That 2001 legislation would have slowly doubled an existing $500 credit through 2010.
Last year, Congress raised the credit to $1,000 immediately, but only through 2004. Without congressional action this year, the credit will drop to $700 in 2005, effectively raising taxes on close to 30 million families.
Under this bill, married tax filers with incomes as high as $250,000 could receive the full $1,000 credit for each of their children (up from the $110,000 income level in current law). Families with three children who earn as much as $309,000 would be able to obtain a partial credit. At the same time, the House bill provides only token tax relief for some low-income families, and leaves out the neediest families entirely according to The Children's Defense Fund. H.R. 4359 accelerates by one year the increase in the refundable portion of the child tax credit for some low-income families, but they will still receive only a few dollars a year.
The House has now voted to permanently extend three pieces of the Bush tax cuts that mostly target the middle class: the expanded child credit, the new 10 percent income tax bracket and relief from the "marriage penalty." House members also approved a one-year patch to slow the expanding alternative minimum tax through 2005.