Tax refunds or taxpayer expense

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(Host) Commentator Allen Gilbert thinks that bad economics and political posturing are behind the child care tax credit checks mailed to families this summer.

(Gilbert) Normally, if I opened my mail one day and found a check for $400, I’d be pleased as punch. But it’s hard not to feel a bit cynical about the tax “refund” checks that went out this summer to families with kids.

That’s because for many families, the checks probably won’t be spent for back-to-school supplies at the local mall or online catalog stores. Instead, the checks will probably go to pay other tax bills.

Our local property tax bills have been climbing partly because the federal government won’t keep its promises on school funding, especially around special education. Property taxes also keep climbing because the state filched some education funds to balance its books. Those books weren’t balanced partly because federal tax cuts have hurt state revenues.

If you’ve been following stories about the bottom line of the federal budget, you know the refunds aren’t real money – they’re borrowed money. Our country will run a $450 billion deficit next year.

It’s not just public debt that we should be concerned about, though. It’s personal debt, and I’m not thinking just about credit card debt. A kid who’s considering college faces an average of $20,000 in student loans when he or she finishes. And that figure doesn’t include any loans that parents might take out to help their kids.

The tax credit also has a distinct political whiff about it. In fact, I was reminded of the accusations that Vermont Democrats faced when Act 60 passed. Democrats insisted that Vermonters receive Act 60 prebate checks to help them pay their property taxes. Getting a check in the mail is an effective way of saying, “See, we’re working for you.”

Republicans in Washington did the trick one better, though. Not only did families get a check, they also got a separate mailing telling them that they were about to get a check.

This mailing was called “Notice of Advance Payment of Increase of the 2003 Child Tax Credit.” It was quite blunt in recognizing the U.S. Congress and President George Bush for giving Americans “broad-based tax relief.” Politics aside, couldn’t the two mailings have been combined? Somehow, when the government is running a $450 billion deficit, you’d think there’d be a big push to save on postage.

Some families got a nasty surprise when they received an increased credit for only one of their two kids. You may remember that a controversial provision of the tax cut bill was that low-income families wouldn’t be getting checks. A not-so-well-known provision was that any family with a 17-year-old wouldn’t be getting a check for that child. Now, if you’ve got a 17-year-old at home, you know that a 17-year-old is not an economy model of a child. But the government needed to trim a few dollars from the overall cost of the tax refund program. So it narrowed “broad-based tax relief” a bit by shutting out 17-year-olds.

On each check was the message “Tax relief for American families.” That seems a cruel joke. It would be nice for some humor to help us through our current economic mess. But not at taxpayer expense.

This is Allen Gilbert.

Allen Gilbert of Worcester is a writer and parent who is active in education issues.

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