House Child Credit Bill Gives Bigger Tax Break to Members of Congress than to Low-Income Working Families, 6/12/03

June 12, 2003

HOUSE CHILD CREDIT BILL GIVES BIGGER TAX BREAK TO MEMBERS OF CONGRESS
THAN TO LOW-INCOME WORKING FAMILIES
By Robert Greenstein

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The child tax credit bill on which the House of Representatives will vote today gives a much larger new tax break to Members of Congress — who already receive hefty tax cuts under the tax-cut bill signed two weeks ago — than to the low-income working families left out of the recently signed bill.

With a salary of $154,700 in 2003, Members of Congress with one or two children are ineligible for the child tax credit under the current law.

Under the House bill, married filers that have two children and incomes of $154,700 will receive a child tax credit of $1,750 — or $875 per child. For such a family, this is a $1,750 tax cut in tax year 2003. This tax cut will be on top of the generous tax cuts that people at this income level — including Members of Congress — receive under the tax-cut bill signed two weeks ago. (Members of Congress with outside income that raises their total income somewhat above $154,700 will receive a smaller tax cut under the House child credit bill.)

Similarly, a House member with three children already is receiving a $750 tax cut as a result of the child tax credit provisions in the newly enacted tax-cut law. Such a Member will receive a further $2,000 tax cut from the child tax credit provisions of the House bill.

By contrast, low-income working families with children left out of the recently enacted tax cut law will receive much smaller tax benefits. A married family with two children who earns $15,000 will receive a tax benefit of $225 in 2003 — or $112.50 per child — from the House bill. This is about one-eighth of the new tax break that a Member of Congress with two children and an income of $154,700 will get.

A married family with two children and income of $20,000 will receive a tax benefit of $475, or $237.50 per child. This is a little over one-quarter what the Member of Congress with two children and an income of $154,700 will receive under this legislation.

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