The recent Bush tax cut offered a child-credit rebate to lots of Americans, but not to millions of low-income taxpayers. Now Congress is squabbling over attempts to restore this tax break, which attempts to spread just a handful of the billions being handed out to people who actually need it.
Tom DeLay isn’t buying it. This is his explanation, in today’s N.Y. Times: “To me, it’s a little difficult to give tax relief to people that don’t pay income tax.”
DeLay would have you believe that the Democrats and moderate Republicans who are pressing this $3.5 billion tax-cut handout — and who have suggested that the Republicans goofed in leaving it out while pushing for tax cuts for investors that cost hundreds of billions of dollars — are being illogical. What? Give tax rebates to people who don’t pay taxes at all?
But note that insertion of the little word “income.” People in the bracket under discussion — roughly $10,000 to $25,000 a year wage earners — pay plenty of taxes. But they pay it in payroll taxes, which typically swipe about 8 percent of income. The Republican tax-cut architects have always done a deceptive shuffle with the language here: Payroll taxes count as taxes when these legislators want to tally up the onerousness of the tax burden on American citizens. But the same taxes magically disappear when they want to keep low-income people off the gravy train that they are loading up for their high-income constituents and campaign contributors.
All of which is a shame — not only in the broad moral sense that helping people who are struggling on low incomes is a social good in and of itself, but also in the pragmatic sense that when you put a $400 tax credit in the pockets of low-income wage earners they are more likely to spend it and help boost the economy.