Politicians Take Sides in Ongoing Child Tax Credit Battle

President Bush has signed his $350 billion tax cut bill, but the arguments over what should and should not have been included in the bill rage on.

Democrats anxious to gain ground with their constituency of low-income workers and some moderate Republicans are asking for additional legislation that will make the Child Tax Credit a refundable credit for workers who don't earn enough income to actually pay any income tax.

Olympia Snowe (R-ME), a Republican Senator who voted against the bill, argues that not giving low-income people a refundable tax credit for their dependent children is, in effect, "penalizing low-income working families."

Representative Nancy Pelosi (D-CA), contends that a non-refundable tax credit "leaves behind millions of children from working-poor families."

White House Press Secretary Ari Fleischer countered that the point of the tax cut bill was to "deliver tax relief to the people who pay income taxes," not to "go above and beyond the forgiving of all income taxes, and you actually get a check back from the government for more than you ever owed in income taxes."

The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) provides for an increase in the Child Tax Credit from $600 to $1,000 per qualifying child. The IRS will mail rebate checks this summer to 25 million families who, based on information in their 2002 income tax returns, appear to qualify for the additional $400 per child tax credit.

Because the President has already signed the current tax bill, any decision to expand the Child Tax Credit provisions to make the credit a refundable credit for those taxpayers who don't pay any income tax would require new legislation.

An attempt at new tax legislation this year might not be welcomed in Washington. "The [JGTRRA] bill is over and done for $350 billion, and I don't want to spend another dime," said Senator George V. Voinovich (R-OH).


Be Prepared: Order Your Tax Legislation Summary Today
AccountingWEB has prepared a summary of the Jobs and Growth Reconciliation Tax Act of 2003 - written for the non-tax professional - for you to offer to your clients. Our Tax Legislation Package includes both an MS Word formatted document (that you can cut and paste as you wish) as well as an HTML formatted document that you can cut & paste right into your Web site immediately. Find out more today!

You may like these other stories...

British financial watchdog to investigate Tesco accounting scandalBritain’s financial watchdog, the Financial Conduct Authority (FCA), has launched a full investigation into the Tesco accounting scandal that has now...
The law makes it difficult for itemizers to deduct medical expenses. To reap any write-off, you must pay bills that aren't covered by insurance, reimbursed by employers or otherwise satisfied by, for example, a company-...
Drug patents held overseas can pare makers’ tax billsAs the Obama administration tries to stop companies from avoiding taxes by moving their headquarters overseas, the makers of some of the world’s most lucrative...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.