ANNAPOLIS – Maryland families will fare better under President Bush’s proposed $1.6 trillion tax cut than those in surrounding states, according to a report released Tuesday by the Center on Budget and Policy Priorities.
About 136,000 Maryland families would not benefit from the tax cut because they pay no federal income taxes. However, the center’s report showed they still pay significant federal payroll and local sales and excise taxes, which aren’t affected by Bush’s tax cut.
Nationwide, about 12.2 families with children will not receive any tax reduction if Bush’s tax cut is enacted.
Bush would phase in the tax cut over 10 years. Across-the-board reductions will account for almost $1 trillion of the total, according to The New York Times. His plan also includes a doubling of the child tax credit to $1,000, an end to the “marriage penalty” that taxes couples more than two single people and repeals the estate tax.
“Poverty has persisted” throughout the booming economy, said Ralph Moore, vice president and director of community services for the Baltimore-based Center for Poverty Solutions. “If people didn’t get raised substantially (then), what hope is there for future economic circumstances?”
According to Moore, one of every five children in the nation lives beneath the poverty line. In Baltimore, it’s one in three children.
“It’s a shame our most vulnerable citizens are enduring poverty the most,” Moore said.
This tax cut won’t really help lower-income families, and by extension, their children, Moore said.
“If (the tax cut) is not going to help their parents, it’s not going to help them,” he said. “We’ve got to make a special effort to target people in need.”
However, Maryland families will fare better than those in neighboring states.
While 21 percent of the state’s low- and moderate-income families wouldn’t receive any benefits from the tax cut, 25 percent of Virginia’s families won’t see any of the president’s tax relief, according to the report.
In Pennsylvania, 26 percent of families will not benefit, nor will 29 percent of Delaware’s families. In West Virginia, 42 percent of families are excluded from the tax cut’s benefits.
Typically, those families already receive multiple benefits from the federal government, such as welfare and Medicaid, according to Kenneth Timmerman, Maryland Taxpayers Association president.
Tax justice “should benefit the people who are paying taxes,” said Timmerman. “If they don’t pay income taxes, why should they get a tax rebate?”
Doubling the $500-per-child tax credit will eliminate income tax payment for many families, Timmerman said.
“It will take large numbers of people totally off the tax rolls,” he said.
About 255,000 children, or 21 percent of Maryland’s children, will be left out in the cold by the tax cut. According to the report, Bush’s plan to double the child tax credit would also skip these families.
“They are already beneficiaries of the taxpayer,” Timmerman said of the families, adding they receive a state earned income credit.
Moore wants to see more efforts to prevent people from sliding into poverty and depending on special services.