Press Releases

Washington, D.C. The Children's Defense Fund (CDF) today expressed dismay at the U.S. House of Representatives' passage of H.R. 4359, a bill that makes ill-advised changes to the child tax credit. This bill is another tax cut heavily slanted towards providing breaks for wealthy taxpayers, which adds to the growing list of such bills that already have been signed into law since 2001.

“Instead of passing a child tax credit bill that helps more working families lift their children out of poverty, the House of Representatives passed a bill that is loaded with more tax breaks for the rich,” said Children's Defense Fund President and Founder Marian Wright Edelman. “Under this misguided bill, a family with a parent who works full-time at the minimum wage would not be able to get a dime of the child tax credit, while a wealthy family making $250,000 a year would receive a giveaway of thousands of dollars. This epitomizes the morally bankrupt priorities that have permeated the thinking of our elected leaders in Washington. It is outrageous that the House continues to pass bills lavishing tax breaks on the wealthy while purposefully leaving behind millions of children in hard-working families struggling to make ends meet.”

The Child Credit Preservation and Expansion Act of 2004 (H. R. 4359) provides tax breaks to upper-income Americans by dramatically increasing the income limits that determine eligibility for the child tax credit—at a cost of $65 billion. Under this bill, married tax filers with incomes as high as $250,000 could receive the full $1,000 credit for each of their children (up from the $110,000 income level in current law). Families with three children who earn as much as $309,000 would be able to obtain a partial credit. At the same time, the House bill provides only token tax relief for some low-income families, and leaves out the most needy families entirely. H.R. 4359 accelerates by one year the increase in the refundable portion of the child tax credit for some low-income families, but they will still receive only a few dollars a year.

H.R. 4359 is another example of one of the many tax bills over the past three years that has focused on providing tax breaks for the wealthy. Expensive provisions in the Bush Administration's tax cuts of 2001-2003 lowered tax rates, reduced estate taxes, and cut dividend and capital gains taxes, all of which mainly benefit individuals in the top income brackets. Tax Policy Center data show that as of 2004, the combined effects of the tax bills that have been passed will result in millionaires receiving a tax cut of over $123,000 while those with incomes in the $10,000-$20,000 range can expect a tax break of about $190. Despite the fact that the deficit has continued to increase since the 2001-2003 tax cuts were signed into law, the House has voted to pass a series of four additional tax cuts this spring. According to the Tax Policy Center, the top 10 percent of households would receive about half of the tax-cut benefits from these bills while the lowest 40 percent would receive less than 3 percent of the benefit. The average tax change for these lower-income individuals would be about $50 in 2005.

Edelman said, “Instead of pouring out even more money into the hands of the rich, the House could have chosen to make the child tax credit fully refundable, lifting one million children out of poverty. Like many other tax cuts that have passed the House, the tax cuts in H.R. 4359 are not paid for and will add to the escalating federal deficit our children will inherit. This vote is a shameful comment on the priorities of Members of the House of Representatives.”

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The mission of the Children's Defense Fund is to Leave No Child Behind and to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start, and a Moral Start in life and successful passage to adulthood with the help of caring families and communities. CDF provides a strong, effective voice for all the children of America who cannot vote, lobby, or speak for themselves. We pay particular attention to the needs of poor and minority children and those with disabilities. CDF educates the nation about the needs of children and encourages preventive investment before they get sick, into trouble, drop out of school, or suffer family breakdown. CDF began in 1973 and is a private, nonprofit organization supported by foundation and corporate grants and individual donations. We have never taken government funds.