The Giveaway

Neal Boortz slammed the following opinion blurb from the Knoxville News-Sentinel in his June 9 column:

Don't expect any new tax bill to pass Congress giving low-income families their fair share. High-income taxpayers will get the lion's share of the $350 billion tax package President Bush signed into law. Congress at the last minute excluded 6.5 million from the lower tax rungs to cut costs.

There's a majority of votes in the Senate to put things right, but House Republican Leader Tom DeLay of Texas is planning to load down any such bill with other tax-giveaways the Senate won't take. Bottom line: the issue will survive into the 2004 campaign.

So let me see if I've got this right... Those who have paid the lion's share of the taxes will get the lion's share of this tax cut package? [Some people still have trouble learning that x% of 0 is indeed 0].

Moreover, Boortz rightfully attacks the usage of the word "giveaway" in this piece.

An analogy: Let's hypothetically say we're all back in 3rd grade on Halloween. I hide in the bushes, then grab a large quantity of candy from your bag and run off. Later on, I decide to give you a few pieces of Snickers back to you and call it a "giveaway". In addition, I cave into pressure from parents groups and give some of your candy to kids who didn't even step out of their houses for Trick or Treat that night, all in the name of distributing a "fair share".

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I could be wrong (not that

I could be wrong (not that uncommon) but I thought that the tax cut that was dropped for the lower tax bracket was a child exemption thing, raising the claim that your children count for from $600 to $1000. This affected the up to $24,000 (or whatever the number is) tax bracket. All of the other tax brackets above that got the tax cut. While I understand that lower income households do not pay nearly as much dollar-wise as high dollar households, but a cut is a cut. Even if it's a small amount, it's still a break that everyone else got and they didn't. And if I am not mistaken (again, it's bound to happen more often than not since I am new to this following economics thing), the lower income households usually have more kids than the higher income households, actually making this more beneficial for them.

I could be waaaay off here, but that's just what I understood from what I had read.

If a group does not pay

If a group does not pay taxes to begin with, one cannot give them a "break" from taxes.

The problem is that for the tax bracket in question, putting all the tax credits for the poor into play (including per child tax credits), they end up with credit for paying a shload of taxes, far in excess of what they owe, and thus are entitled to a "refund" of taxes they didn't pay in the first place.

That's welfare-by-proxy (for one thing) and a very inefficient way to do it.

But regardless of that, the problem with the political rhetoric is the idea that everyone should get a "break" and thus the negative income tax should be made more negative for the lower tax brackets- even though the original intent was to cut taxation, not increase welfare payouts. It is wrong to link welfare considerations with a tax cut package, for philosophical and semantic purposes.

The child tax credit is one of many unnecessary complexities to the Federal Tax code that make tax paying so time consuming and expensive (as the tax credit doesn't apply in some situations, goes away for other brackets, can be reinstated based on x, y, and z, etc). Regardless of the welfare implications, it should not be part of the tax code, and it should not have been considered in this tax cut bill, as the people on the recieving end of this welfare benefit aren't paying taxes anyway.

Welfare should be in welfare bills- social engineering should be kept OUT of the tax code.