Editorial: Fairness no factor in tax cuts

Tuesday, June 3, 2003 | 9:02 a.m.

The White House and Republican leaders in Congress have been touting the economic benefits and fairness of the $350 billion tax-cut package signed into law last week by President Bush. One of the purported benefits of the tax cuts -- jump-starting the economy -- has always seemed shaky at best. Now we're discovering, in greater detail, just how unevenly and unfairly the tax cuts are being distributed.

Late last week The New York Times revealed that 6.5 million minimum-wage families, which includes 12 million children, won't receive the $400 per-child tax credit in the new law. Since many low-income wage earners are just scraping by as it is, and don't have the ability to save, they would be among the most likely to spend it and help spur the economy. It seems heartless to provide the wealthy with a large tax cut when shutting out minimum-wage families for a tax credit that is expected to be delivered in July. The tax credit for low-income families would be a big help for parents, whether for putting food on the table or for buying their children clothes for school.

Some Republicans counter that minimum-wage earners currently don't pay income taxes, so they don't deserve any more help. But these individuals do pay federal payroll taxes, a regressive tax that hurts the poor more than it does the wealthy. Besides, as The New York Times reported Sunday, there are roughly 7.5 million people who do pay income taxes who will also be left out under the tax cuts, principally because they don't have income from dividends or capital gains and don't have children, which makes them ineligible for the child tax credit.

It's obvious that President Bush's tax-cut plan doesn't meet basic levels of fairness. Congress should scale back the dividend tax cuts enough so that minimum-wage families can also have a little extra spending money this summer.