Brattleboro, (Vt.) Reformer, Dec. 1:
We’re all for tax reform. As anyone who has had to fill out a long form knows, the most often result is not an increased tax return, but a massive headache.
Nonetheless, tax reform as proposed by the GOP is not the answer; unless, of course, you are a member of the “people are corporations” camp or the 1 percent club. The GOP’s most recent proposal would accord $440 billion in tax breaks over 10 years for businesses. We would like to lay the blame totally at the feet of the Republicans in Congress, but aides to Sen. Harry Reid of Nevada negotiated the deal with the GOP.
The president has indicated the deal, which would prevent the expiration of tax breaks heavily tilted in favor of corporations, will be vetoed if it reaches his desk. Even though Obama supports extending many of the tax breaks in the accord, two-thirds of them “provide permanent tax breaks to help well-connected corporations while neglecting working families,” said Jennifer Friedman, a White House spokeswoman.
According to the New York Times, the tax breaks the deal would make permanent include an expanded research and development tax credit, a measure allowing small businesses to deduct virtually any investment, the deduction for state and local sales taxes, the American Opportunity Tax Credit for college costs, deductions for employer-provided mass transit and four different breaks for corporate and charitable giving.
While all of those tax breaks are laudable, the GOP showed its true colors by leaving out two that benefit the working poor: a permanently expanded earned-income credit and a child tax credit.
Zachary A. Goldfarb, writing for The Washington Post, the two tax credits have raised low-income Americans’ income at a time when the economic recovery has been punishing for the poor.
And why did the GOP leave the EITC and CTC out of the deal?
“Republican negotiators announced they would exclude those measures as payback for the president’s executive order on immigration, saying a surge of newly legalized workers would claim the credit,” noted the New York Times’ Jonathan Weisman.
Well … Snap! That’ll teach you to take executive action. But who will suffer the most if the deal goes through? Residents of the states who turned out in droves to toss Democrats out and give Republicans control of the both branches of Congress.
John Michaelson, writing for the Lebanon Democrat in Tennessee, noted the earned income tax credit that allows many low-income working families to keep more of their earnings is especially important in rural areas and small towns across Tennessee and the country.
And the Daily Iowan noted “Childcare costs are continuing to increase much faster than household income, forcing some to stay at home and further burdening the household’s financial status. Sufficient childcare allows more parents to work, increasing household income while generating GDP for Iowa and the United States.”
The Daily Iowan noted in 2013, working families with children earning $37,870-$51,567 received the refundable credit. Workers without children who earned under $14,340 ($19,680 for married couples) also received the credit. “People who work full-time shouldn’t go to bed hungry ”“ at least that is the idea behind the tax credits. People put these credits into their residences, their savings, or investments in education and finances.”
The EITC has received broad support over the years by members of both parties for the mere fact that it rewards people who work hard but are unable to get ahead. It has helped millions of families pay bills and buy necessities, while at the same time pumping up local businesses. There is a rational discussion to have over the president’s immigration order, but punishing the working poor pay seems childish at best and churlish at worst. The GOP and its enablers in the Democratic party should think again.
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