| Related CTJ Analyses | |
| Most Taxpayers Get Little Help from Bush Tax Plan | 5/30/03 |
| Effects of First Three Bush Tax Cuts | 6/4/03 |
Over the next four years, the child credit bill passed on June 12 by House Republicans would give 2.4 times as much in total tax cuts to families with children under 17 with family incomes above $104,000 than it would give to families making less than $28,000. Fewer than one in seven families with children under 17 makes more than $104,000 this year, while almost one in three makes less than $28,000.
An analysis of the House GOP bill by the Institute on Taxation and Economic Policy finds that over the next four years:
- Families with children under 17 and incomes of $28,000 or less would get an average of $421 in tax savings — only $105 a year.
- In contrast, families with children under 17 and incomes of $104,000 or more this year would get an average of $2,245 in tax savings — $561 per year.
- Families making less than $28,000, who are 30.3 percent of all families with children under 17, would get 11.9 percent of the tax cuts under the bill over four years.
- Families making more than $104,000, who are 13.7 percent of all families with children under 17, would get 28.7 percent of the bill’s tax cuts over four years.
| Effects of the House GOP 2003 Child Credit Plan in 2003-06 on families with children under 17 | ||||||||||
| Income Group | Millions of families w/ kids < 17 in 2003 | % of these families | Effects in 2003 & 2004, per year | Effects in 2005 & 2006, per year | Four year totals | |||||
| % with tax cut | Ave tax cut (all) | % of total tax cut | % with tax cut | Ave tax cut (all) | % of total tax cut | Ave tax cut (all) | % of total tax cut | |||
| Less than $16,000 | 5.7 | 14.3% | 26% | $ –30 | 3.8% | 6% | $ –9 | 0.3% | $ –79 | 1.0% |
| $16,000 - 28,000 | 6.4 | 16.1% | 52% | –148 | 20.7% | 62% | –215 | 8.2% | –725 | 10.9% |
| $28,000 - 45,000 | 7.1 | 17.7% | 19% | –122 | 18.9% | 90% | –448 | 19.0% | –1,139 | 19.0% |
| $45,000 - 73,000 | 9.7 | 24.0% | 3% | –33 | 6.9% | 99% | –556 | 31.9% | –1,177 | 26.6% |
| $73,000 - 104,000 | 5.5 | 13.8% | 1% | –5 | 0.5% | 98% | –522 | 17.2% | –1,052 | 13.7% |
| 2.7 | 6.6% | 61% | –377 | 21.8% | 96% | –1,111 | 17.5% | –2,976 | 18.4% | |
| 2.3 | 5.6% | 51% | –555 | 27.3% | 38% | –425 | 5.7% | –1,961 | 10.3% | |
| 0.6 | 1.5% | — | — | — | — | — | — | — | — | |
| ALL | 40.2 | 100.0% | 23% | $ –115 | 100.0% | 73% | $ –418 | 100.0% | $ –1,066 | 100.0% |
| ADDENDUM | ||||||||||
| Less than $28,000 | 12.2 | 30.3% | 40% | $ –93 | 24.5% | 36% | $ –118 | 8.5% | $ –421 | 11.9% |
| $104,000 or more | 5.5 | 13.7% | 51% | –411 | 49.1% | 62% | –712 | 23.3% | –2,245 | 28.7% |
| The proposal would make the following changes to current law: (1) In 2003 and 2004, the refundability percentage for the child credit would rise to 15% (from 10%); it is already scheduled to be 15% in 2005 through 2010. (2)Starting in 2003, the phase-out of the credit would begin at $150,000 of income (rather than at $110,000). (3) Starting in 2005, the child credit would rise to $1,000 per child (from $700 in 2005-08 and $800 in 2009). Note: Percentages with tax cuts and average tax cuts are for families with children under 17 only. (The other 93 million taxpayers are not affected by the bill.) |
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