Do you think the tax credit for dependant children should be eliminated?

[Stinky The Clown]

Do you think the tax credits for sending your children to college should be eliminated?

[redwitch]

1. No.

Please, no.

[OmahaBlueDog]

2. Hell No!

[OmmmSweetOmmm]

3. An emphatic NO!!!!!

[sinkingfeeling]

4. Here's what our tax 'breaks' amount to. Which ones should we eliminate?

[hfojvt]

19. I wish they would add two columns to that

what is the percentage (or amount) of those tax credits that goto a) the top 10% and b) the bottom 50%.

I suggested eliminating a lot of those credits and doubling the standard deduction because many of those itemized deductions are huge tax breaks for those in the top 10%, but my suggestion was not well received on DU. Robert Reich did not like it either when I emailed him.

http://journals.democraticunderground.com/hfojvt/25

But as I wrote back to him:

"According to the 2001 SAUS, only 30% of all taxpayers were itemizing deductions and yet their itemized deductions were $676 billion compared to $459 billion for the standard deductions of the 70%. Of the 38.2 million itemizing their deductions in 1998 - 62% of them had AGIs over $50,000. The home mortgage deductions for the 9.67 million itemizing filers with AGIs between $20,000 and $50,000 was $58.4 billion compared to $80.65 billion for the 6.28 million filers with AGIs over $100,000.

In taxes paid, it is even worse. 31.91 million filers itemized their state income taxes to the tune of $152.6 billion. Of that total 60.5% of it was from the 6.68 million filers with AGIs over $100,000 that took the deduction. 80% of all filers with AGIs over $100,000 took that deduction.

Some of the other numbers are interesting too. For example, - 360,000 filers with AGIs less than $10,000 took the home mortgage interest deduction for an average of $6,547. Obviously their AGI is not their real income since you cannot pay mortgage interest of $6,500 on income of less than $10,000."

I never heard back from him.

[county worker]

36. You are forgetting about the Alternative Minimum tax.

Many of those deductions are cut way down because of the AMT. It effected me two years ago and may again and I am not wealthy.

[hfojvt]

48. well I would expect the IRS to include that in their stats on the credits

otherwise I have no way of knowing. I thought they keep patching that for incomes under $150,000.

Or do you make $180,000 a year and consider yourself "not wealthy"?

[jpljr77]

35. Doesn't healthcare reform eliminate #1? So that's a start. n/t

[Llewlladdwr]

5. No.

Having children is a net benefit to society.

[lukasahero]

6. No

And given I sense an agenda to these poll questions let me make the requisite disclaimer: I have no children by choice.

I still believe tax credits should be given to those with dependent children and I believe we should do more to supplement a college education.

You know just because we don't have children doesn't make us self-obsessed ogres.

[Andy823]

7. Of course not

And if the democrats are smart they will put up a bill to make sure these tax cuts stay, and make the republicans vote on the bill. If republicans vote NO, it would be very bad for them come election time, along with any democrat who would vote NO. Force republicans into a corner and make them defend heir votes to the people. Even if all the tax cuts end up expiring because republicans vote NO, they can always come back with another bill to put tax cuts for those making under the $250,000 limit up for a separate vote and see what the republicans do. Keep putting the bill on the floor day after day and make the republicans defend their actions. It will be very hard for "all" republicans to vote no against a bill that helps out the middle class simply because the rich don't get a tax break. It would really paint them as the party of the "rich", and that won't be good come election time!

[Peacetrain]

8. Just curious..

Is there a point to the life style questions on having children and elimination of tax credits? I think you are getting there.. but dang stinky you are slow..

[Stinky The Clown]

9. There are people who wish to severely reduce taxes and this is an idea being floated.

What's curious, it has some proponents here, too.

[Llewlladdwr]

11. Wouldn't eliminating the credit actually cause one's taxes to increase?

Or am I misunderstanding you?

[BadgerKid]

18. Just noticed this is a progressive credit

in that it favors lower-income providers/families with more children.

[hfojvt]

21. that makes sense in theory, but what do the facts say?

For 2008, there were 44.25 million filers with incomes between $20,000 and $50,000. Of that total 10.569 million had a child tax credit for a total savings of 9.38 billion. That's only 23.9% of families with incomes between $20,000 and $50,000.

Looking higher up, there were 11.729 million filers with income between $75,000 and $100,000. 4.017 million of them (or 34%) had a child tax credit for a total of 6.873 billion.

There were 13.851 million filers with incomes between $100,000 and $200,000. Of that total, 3.445 million took a child tax credit, or 24.87% for a total of $4.782 billion.

So, we have $9.38 billion going to people making less than $50,000 and $11.655 billion going to people with incomes over $75,000.
Does not seem all that progressive to me. Not to mention the 33.68 million filers with incomes between $20,000 and $50,000 who receive ZERO benefit from this tax credit.

[BadgerKid]

17. Who's floating it? n/t

[Stinky The Clown]

22. I heard it from three people in three conversations.

They people telling me about it were all republicans. Not totally insane types, but they're pretty far right, and very well educated. I only asked one of them where he heard it and he told me someone told him about it.

I can only conclude it is a teabagger notion. That said, I have seen similar sentiment right here on DU, but the rules prevent me from pointing that out. Read my two earlier threads on this topic and judge for yourself.

[hfojvt]

10. yes to both

but unfortunately it would be political suicide, so it ain't gonna happen, and I would not even push for it.

[Llewlladdwr]

13. Why would you support eliminating these tax credits?

Serious question. I'm curious as to how you see this benefiting society.

[hfojvt]

20. because most of the benefits goto those with higher incomes

Think of a single person age 23 working full time at Wal-mart or a grocery store or almost any other retail job. That person makes about $8 an hour or about $16,000 a year. First, they pay $1,224 in FICA taxes. Figuring their taxes in 2008 (since that is the form which I just found and it is close enough to today's rate). They also pay about $700 in income taxes unless they take an IRA deduction (which reduces the amount they have to live off of).

In effect, the government is making this person subsidize a college education for the child of couples making over $50,000 a year. Of course, I know from many past arguments on DU that a couple making $50,000 a year is not rich but by my calculation they make more than 3 times as much as the poorer single person who is being asked to subsidize college for their kid or kids, and some of the people taking the credit probably make over $150,000 a year.

My own 2008 tax form shows an income of $11,779.17. If I had not put $920 in my IRA I would have paid taxes of $283. Does it really benefit society to force me to subsidize college educations for the children of higher income couples?

[Boojatta]

23. There you go again, using facts.

When you have to stoop to relying on facts, defeat is inevitable. It would be more polite to simply admit that you have lost the debate.

[uncommon]

25. The child tax credit is very helpful to parents with low and modest incomes --

and at your income do you not qualify for the EIC? Another very helpful benefit.

[fizzgig]

27. the cutoff for eic qualification is $13,440 if you are single with no kids

a single person with no kids working fulltime at minimum wage does not qualify for the credit

[uncommon]

28. The person who posted here had income lower than that.

[hfojvt]

32. and I did get an EIC

a whole $69. The EIC is mostly geared for families with children. For example, a couple with two children and three times my income (or $36,000) would get an EIC of $802.

But I fully support the EIC, because, unlike the Child tax credit, most of its benefits goto families making less than $30,000 a year. Heck, I even supported the child tax credit when it was only $200, but I knew, even then, that politicians, or both parties, would fall all over themselves to increase it.

edit: my other beef is that because the credit is not straight-up refundable, but requires lower income people to file form 8901, I wonder how many lower income couples are not getting the credit they are entitled to because they cannot afford H+R Block or some other tax preparer.

[uncommon]

38. I have received it in the past using the free version of Turbo Tax...

it's not necessary to hire someone to do it for you.

[uncommon]

26. Also, a couple making a combined household income of $50K is hardly rolling in dough -

especially when they have one or more children and possibly a mortgage.

[BlueCheese]

50. I agree.

But I'm not sure the tax system should favor them over a single person making $15,000, who almost certainly can't afford a mortgage.

[Llewlladdwr]

30. Let me take this in steps...

What about a married person of age 23 in the same situation? The child tax credit helps them much more than it does an individual or family making over $50,000 a year.

As far as $50,000 being three times as much as our hypothetical 23 year-old single makes, well, the family is also supporting three times the people (assuming two parents and one child). Three times the income doesn't seem excessive to me.

But finally, yes, I think it really does benefit society to encourage families to have children, and to educate those children. If we don't keep producing new, functional citizens how in the world can we have anything above a subsistence level economy?

Thanks very much for your reply, by the way. This is an issue where it's sometimes hard (for me at least) to see the other side's point of view.

[hfojvt]

39. a couple making $16,000 already gets an EIC of $2,853

if they have one child and $4,716 if they have two children. (those numbers are from 2007). They already get an exemption of $3,500 for each kid. How much more does the tax code need to tilt towards families with children?

I have heard the per person argument before and do not think it is that strong. For one thing, expenses would not triple. They would not need three houses and three cars and three phones and three cable connections, etc. Even if usage tripled in gas, water, garbage and electric, the bills would not triple. My city garbage bill is a flat fee. A family of 6 pays the same monthly rate as a single person. The water bill is regressive. They have a minimum charge of 1500 gallons per month for $11 and then it is about $3 for every 750 gallons (a unit) above that. Since I use about one unit of water per month even qunitupling usage would only change the bill from $11 a month to $20 a month. Same thing with gas, where the minimum charge is about $15 a month and for electric where the minimum charge is about $8 a month. Even tripling usage (which would not happen with three people) would not triple the expense.

Then there's housing. I happen to own a three bedroom house, so I could put a family of three in here without changing that expense at all.

I think those families making over $40,000 and especially those making over $75,000 can pay for their own child care expenses and college expenses without getting effective subsidies from people who make minimum wage, or less.

[uncommon]

40. I think you have a completely unrealistic view of income and expenses -- $40K a year

is NOT a lot of money.

I make a little over $40K a year - I am a single mother and the cost of housing and utilities for my house (rent, not mortgage) last year was about $19,000 - this is rent, gas, electric and cable/internet (sure, a luxury, one that I also use for work). That's almost half of my GROSS income. Add food and transportation and phone and there is precious little left over to pay for childcare and then extras.

And then I will also get a smaller tax refund this year even though I paid significantly more taxes because I make more money than I used to.

[hfojvt]

43. well there were 41.3 million tax filers making less than 30K and more than 10K

I discount the under 10K crowd of 25 million or so, because they are probably mostly teen-agers.

Most of them would probably love to have another $10,000 a year - even if it would only be $6,000 after taxes.

40K is not such an outrage, but when the credit goes to families making over 100K, then I am throwing the challenge flag.

[uncommon]

44. There is a *HUGE* difference between $40K and $100K lol.

[hfojvt]

51. as I said though

"and especially those making over $75,000 can pay for their own child care expenses and college expenses without getting effective subsidies from people who make minimum wage, or less."

There are over 22 million tax filers making less than 20K and more than 10K. Some of them have children (although only 1.3 million are listed as taking the child tax credit - aha almost 7 million of them use the "additional child tax credit"). I think 40K is twice as much as 20K although I could be wrong about that. These days I cannot even balance a checkbook without a calculator.

[uncommon]

41. As an aside - where do you live that you own a house on $11K a year, because I need to move.

Seriously, that's amazing.

[hfojvt]

45. any place where you can finds houses for less than 35K

and there are lots of such places, although I could not find many on the KCMO side. With 20% down my house payments were about $300 a month including taxes and insurance.

This house is coming up on its 125th birthday, but it is nice than some other houses that I looked at that were 100K or 60K.

Granted the 100K houses were brand new, but they were small, and in a little nothing suburb, with no basements, no driveway, and tiny, unfenced yards. I have no driveway, but I have a basement (sort of), and a double lot with a chain link fence and a giant oak tree and in a city of about 40,000.

Of course, I was making about 23K when I bought the place and then got fired about four months after I moved in. Happy 40th birthday to meeee.

[Zoeisright]

12. No. In fact, I think the tax credit for each person in a family should be

dramatically INCREASED. It's ridiculous that we're only allowed 6 grand or whatever it is for each person. It should be more like $20,000. That would make the system more fair.

[a la izquierda]

14. No...

and I don't have kids, and may never. My husband and I are pretty indifferent on it, and we're both in our mid-30s.
I do, however, wish I could deduct my dogs.

[unhappycamper]

15. The MICC needs your bucks to keep the war machine running.

Fuck education.

For comparison's sake, Education will use 4% of discretionary spending.

Debt service to pay for all those years credit card in the sandbox will cost you 7% of discretionary spending.

The United States military will eat up 58% of discretionary spending.

Do you see anything wrong with this equation?

[JustAnotherGen]

16. Nope

That law was put in place the year after I graduated if I’m correct. It would have made a difference to my parents – and I can’t fathom the difference it makes to a family that Education Is Everything.

BTW –Single never married, no brats of my own. ;-)

But having a well educated work force is critical. Now ask me how I feel about complete total free rides for anyone that pursues a degree in : medicine (nurse, doctor, p.a., physical therapist, emt license, etc. etc.), chemistry, biology, engineering, mathematics, social work, criminal justice . . . and education. I’m not engaged in these fields at all – but they are critical to ensure we have public safety, health, sanity, protection of our weakest members, etc. etc. So I say up the ante and pay the way for any smart, grade grubbing, high test scoring kid that wants to serve their country in these fields.

[slackmaster]

24. No, and I think I should get tax credits for my dependent cats

[Subdivisions]

29. Yeah...

No!

[562dem]

31. Isn't it discrimination against people who are

unable to have children? They can't have this credit

[Fumesucker]

33. Adopted children are eligible for these credits.. n/t

[TheKentuckian]

34. No, but I wish to end breaks for couples and homeowners.

[REP]

37. Above a certain income, yes

[Matariki]

42. Above two children, perhaps.

And college should be paid for, or heavily subsidized, for ALL children. That has a very direct benefit to our future and society as a whole.

Over population on the other hand is the root of many problems in the world. My personal, and unpopular opinion is that more than two kids is kind of selfish.

[Vickers]

46. Sure, right after the deferred income from foreign companies. n/t

[Scout]

47. credit for ONE dependent child per adult only

don't remove the college tax credit.

[BlueCheese]

49. This is probably not popular...

... but I think our politics caters too much to people with children. You always hear about supporting America's "families", and all the tax benefits that follow--child tax credit, child care, exemptions, etc. It always surprised me to hear that a family of four making $45,000 (or something) doesn't pay income taxes, while a single person making less than $10,000 would. I imagine a childless couple could also be pretty badly off.

Generally, I prefer lowering marginal tax rates as a way of helping the middle class. I'm not that fond of tax benefits that imply help only some of an income group.

As I remember, part of Bush's tax cuts was an increase of the child tax credit. This allowed him to falsely imply that his tax cuts helped the middle class as much as the wealthy by looking at effective tax rates. I'd look at letting that lapse, or replacing it with something more evenly distributed.